For most people, it’s not an ideal situation: working for decades and putting money away with the anticipation of a comfortable retirement, only to find that key assets are missing. Tracking down lost accounts and ensuring that you get full access to your retirement benefits is well worth the effort it takes, but many people run the risk of losing access without a reasonable way of recovering them. To prevent this situation from happening to you, it’s essential to first understand how it can happen, and then learn the ways to recover lost or unclaimed retirement benefits from your working life.
Many individual accounts that potential retirees set up personally are easier to keep track of. Whether it’s through quarterly statements or other official communication, these accounts and the entities that manage them often “stay in touch,” which helps you stay organized. Nevertheless, over decades of working, possibly at multiple companies across different states as you advance through your career, there’s a significant possibility that group accounts fall off your radar. They could sit idle or unclaimed, even though they’re funded with your well-earned money. Here’s how to pursue those funds and ensure you keep track of them.
Common Ways to Lose Track of Retirement Benefits and Accounts
According to the AARP, one of the major ways that people lose track of retirement accounts such as 401(k)s is to move around without properly updating contact information for the retirement account administrator. This simple oversight can result in an otherwise healthy retirement account being forgotten in the shuffle. After all, your mind can be occupied with the demands of taking on a new job (or even a new career) at the same time as moving your entire household and arranging for the appropriate utility connections, for example. If you fall out of contact with the company that was managing your retirement account, then it’s possible that you may not roll over the previous account into a new one.
Another way to lose track of a retirement account is to become “non-responsive,” such that the administrator may have your contact information but you miss its communications for one reason or another. The National Registry of Unclaimed Retirement Benefits identifies someone who does not respond to communication as non-responsive, and many accounts don’t have an in-place solution for non-responsive members.
A third way that these accounts often get lost is that you may forget your login credentials for accounts you mostly manage online. If you forget the username and password to a retirement account and its messages go to your spam box, it can be surprisingly easy to leave old retirement benefits unclaimed. It can be a headache to sort through old communications to find the account administrator, and if its website has changed or the company has been bought out or merged with another company, then it can be difficult to find it again on your own.
Rediscovery: Finding Your Unclaimed Retirement Benefits
These accounts often slip away unnoticed, falling out of attention over the course of years. The slow way that this loss happens means that it can be difficult to retrace your steps. Fortunately, with the right help, recovering these benefits is much easier than it used to be. The National Registry of Unclaimed Retirement Benefits offers a free service with which users can plug their Social Security number into a search to see if any employers or account administrators have submitted an unclaimed account on their behalf.
CNBC reports that over 20% of retirement account funds are lost or abandoned, but there are ways to recover these accounts. Aside from the National Registry, there’s also the Department of Labor’s Abandoned Plan Search, which can be helpful for those who have records of their plans from previous employers. If you track down your plan, then you can contact the current administrators and seek to reclaim these funds.
After recovering your existing accounts, prevention is the best step. Even if you’re years away from retirement, there’s no better time than today to set up an auto-rollover on your 401(k) to prevent losing track of it. You can combine rediscovered accounts into your currently active one, which can also reduce administration fees that can eat away at your account’s full value. If you take the time today to find those lost accounts and put protection in place for the future, then you can have one less burden to manage and find yourself in a more secure place when it comes time for you to retire.
Resource Links
“5 Steps for Tracking Down Old 401(k)s and Other Lost Money” via the AARP
“Over 20% of 401(k) Plan Funds Are Lost or Forgotten – Here’s How to Reclaim Yours” via CNBC
“Frequently Asked Questions” via the National Registry of Unclaimed Retirement Benefits
“Abandoned Plan Search” via the U.S. Department of Labor