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Do You Know Where Your 401k Is?

I know several people who have completely lost track of their 401(k)s. Seems crazy or impossible, right? Apparently it’s not so difficult to lose. A friend of mine worked at a small, ten person company for a couple of years. He never really kept tabs on his money and completely forgot about his 401(k) when he was let go.

He didn’t roll his 401(k) into an IRA or even keep tabs of his bank statements over the years. In the mean time the small company switched 401(k) providers. When the company switched they move all current and prior employee’s accounts over to the new provider, but the new provider never sent notification to the employees that their accounts had been moved.

Of course, management at the small company told all current employees that there accounts would be moving over to a new provider, but the previous employee had no idea that his money had moved. The employee hadn’t left under the best circumstances, so he was not in touch with management and had no way of knowing where his account had gone.

In this case the company was still standing, so the employee could always try to phone management. Perhaps, the employee could even call his old 401(k) provider to find out where his funds had moved.

I was initially surprised by this story, but quickly realized that it’s probably not very difficult to lose track of your funds. I’m sure companies move 401(k) providers quite frequently and prior employees who fail to keep tabs of their money could easily find themselves without any knowledge or access to their accounts.

I’ve mentioned my friend’s situation to a number of friends and have been surprised by how many of them have similar stories. I guess the moral of the story is simple: keep track of your money, log into your accounts frequently and, if possible, transfer your money to an IRA after you leave.

spaghetti0625

Tuesday 14th of September 2010

Yup, in order to roll it over, all the stuff I already have says it needs to be more then $1000. And I really didn't want to open up something new for less then $200 and have to switch everything or add to something new...too much of a hassle.

One Frugal Girl

Thursday 9th of September 2010

I didn't realize that you have to cash out a 401(k) that's less than $1000.

spaghetti0625

Tuesday 7th of September 2010

at my old job, when I left, I always got quarterly statements, and I surprised that not a lot of people get them, or they do and throw them out thinking it's junk. Mine was only 193 dollars, and I recently got it sent to me. I couldn't roll it over b/c it was less then 1000, so I'm just going to put it into my Roth IRA. Yea, I'll pay taxes on it during tax time, but all well.