It has been said that squirrels will lose anywhere from 10-30% of the nuts that they hide away for safekeeping. While their effort to store food for the winter is valiant, if their precious resources are left behind, it doesn’t do much for their future. A similar story can be told for forgotten 401(k) accounts.

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How many jobs have you had in your career? A few? A dozen? Maybe more? Over time, those jobs can add up—and so can forgotten 401(k) accounts.

As of May 2023, nearly 29.2 million 401(k) accounts have been forgotten with an average balance of $55,400. That’s $1.65 trillion left behind! ¹

What to do with all those old 401(k) accounts?

You have options:

1. Leave the accounts where they are
2. Roll one or more accounts over to your current employer’s 401(k)
3. Cash-out the account value
4. Roll one or more into an Individual Retirement Account (IRA)

Consolidating your accounts can help make your life easier.

Want to simplify your financial life? Start by consolidating your retirement accounts!

Five reasons to consolidate:

1.  Reduce confusion
Managing multiple accounts across several institutions can be confusing. The fewer retirement accounts you have, the easier it is to keep track of your savings and stick to one consistent, cohesive investment strategy.

2.  Potentially reduce fees
If you have multiple accounts, you might be paying more in fees than you need. Each account could be subject to the same fees, so consolidating accounts may help save you money!

3.  Simplify mandatory withdrawals
Starting at age 73, the IRS says you must make required minimum distributions (RMDs) from specific retirement accounts, including 401(k)s and Individual Retirement Accounts (IRAs). Having your retirement savings in a single account can help you simplify RMDs and avoid potential costly tax penalties.

4.  Don’t get forced out
When you leave a job with a 401(k), your employer must follow IRS and plan rules which may include a
“force-out” provision that requires you to take your money out of the plan if your vested balance is less than $5,000. By consolidating your accounts, you are proactively taking control of your hard-earned savings.

5.  Watch your savings grow
A bonus of that larger balance? Having all your retirement savings in one place provides the opportunity to clearly see the effects of real time account valuation over time.

For more information, please contact:

¹ Capitalize. “The True Cost of Forgotten 401(k) Accounts.” Jun. 2023

This communication is for educational and informational purposes only. The content does not purport to present a complete picture, but we believe the information is representative of issues and needs facing some clients. This should not be construed as specific ERISA, investment, tax, or legal advice. Individuals should seek advice from their wealth advisor or other advisors before undertaking actions in response to the matters discussed. No client or prospective should assume the above information serves as the receipt of, or substitute for, personalized individual advice. All tax laws and regulations discussed are subject to change.
Nothing contained in this communication may be relied upon as a guarantee, promise, assurance, or representation as to the future. Investing involves risk, including, but not limited to, loss of principal.
This is prepared using third party sources considered to be reliable; however, accuracy or completeness cannot be guaranteed.
This research was last updated in May 2023.
RO-25-4899280.©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

About the Author

Aidan A. Hart

Aidan works closely with senior advisors to support the delivery of comprehensive wealth management services to individuals, businesses and trusts. He assists in the development and implementation of personalized financial strategies and is responsible for preparing financial plans, monitoring client portfolios, and helping ensure that client recommendations align with their long-term goals and risk tolerance.

About the Author

Chad R. O’Connell AIF

Chad manages Dopkins’ retirement plan services group, which focuses on investment management, consulting and fiduciary governance services to corporations and not-for-profit entities. In addition, Chad also provides financial services to high net worth individuals and business owners.

About the Author

Treg A. Lewis

Treg is responsible for providing financial solutions for individuals, businesses and employee benefit plans. His goal is to help clients enjoy the confidence that results from identifying what matters most to them, create strategies that align with their values and help them leave a legacy for future generations. He enjoys educating clients so they can be confident in the financial decisions they make in pursuit of their goals.