ONE Advisory Partners

View Original

How to Reclaim Your Forgotten Retirement Funds

Changing jobs multiple times can often lead to forgotten retirement accounts. If you think you might have unclaimed retirement benefits, this guide will help you locate and reclaim your hard-earned money. Let's learn the steps you need to take to find those unclaimed retirement benefits.

Get your FREE Retirement Plan Review today!

Key Steps to Find Unclaimed Retirement Benefits

Finding unclaimed retirement benefits might seem daunting, but with a systematic approach, you can locate and reclaim your forgotten funds. Here’s a detailed guide to help you through the process:

1. Contact Your Former Employer

Most forgotten retirement accounts are tied to your previous employers. Since accounts like 401(k)s and 403(b)s are employer-sponsored, your former employer will have records of these accounts.

Steps:

  • Identify the right contact: Start by reaching out to the benefits manager or the human resources (HR) department of your former company.

  • Provide necessary information: Be ready to supply your full name (and any prior names), Social Security number (SSN), and the dates you were employed. This information will help them locate your account in their records.

  • Request account details: Ask if they have a record of your retirement account and if they can provide the contact information for the plan recordkeeper.

What to Do if the Company No Longer Exists:

  • Contact the plan administrator directly: If your former employer is no longer in business, you will need to contact the plan recordkeeper(e.g., Fidelity, Vanguard, Charles Schwab, Empower). These recordkeepers handle such tasks as keeping your account records, issuing statements, handling distributions and can help you access your funds.

  • Verify your identity: Be prepared to verify your identity using your name (or prior names), SSN,and/or security questions if you don’t remember your login details.

2. Use the U.S. Department of Labor (DOL) Resources

If you don’t remember who the plan administrator is, the U.S. Department of Labor (DOL) can be a valuable resource. Every company files a Form 5500, which includes details about the plan administrator.

Source: U.S. DEPARTMENT OF LABOR

Steps:

  • Visit the DOL website: Navigate to the "Form 5500 Series Search" page at https://www.efast.dol.gov/5500search/.Search for your former company: Enter the name of your former employer in the search bar and be as specific as possible.

  • Download the Form 5500: Choose the year you left the company, download the form, and look for the plan administrator’s details.

  • Contact the administrator: Use the information from the Form 5500 to reach out to the plan administrator and inquire about your account.

3. Check Unclaimed Property Portals

If the above steps don’t yield results, your retirement funds might have been transferred to a state unclaimed property office. These offices hold unclaimed funds until the rightful owner claims them.

Steps:

  • Visit the state unclaimed property websites: Enter your name (and previous name if you’ve changed it since leaving the job).

  • Search for your funds: Follow the instructions to see if there are any unclaimed funds in your name.

  • Claim your money: If you find any accounts, follow the process outlined on the website to verify your identity and claim your funds.

4. Use Online Tools and Resources

Several online tools can help you track down unclaimed retirement benefits. These tools aggregate data from various sources to make the search easier.

Steps:

  • National Registry of Unclaimed Retirement Benefits: This database uses employer and Department of Labor data to help you find unclaimed retirement funds. Enter your SSN to search.

  • FreeERISA: This service compiles forms filed with the Department of Labor, which can help identify your former employer’s 401(k) provider.

  • Abandoned Plan Database: Managed by the Department of Labor, this database contains information about retirement plans that no longer have a sponsor or administrator.

5. Review Old Financial Documents

Sometimes the information you need is right in your old paperwork. Reviewing old financial documents can provide valuable clues.

Steps:

  • Gather old statements: Look for any old 401(k) or retirement account statements you might have kept.

  • Check for contact details: These documents often include contact information for the plan administrator or the custodian of the account.

  • Reach out for assistance: Contact the plan administrator using the information from your old documents to inquire about your account.

6. Seek Professional Assistance

If you’re having trouble locating your unclaimed retirement benefits, consider seeking help from a financial professional.

Steps:

  • Find a financial advisor: Look for a certified financial planner CFP® or a professional specializing in retirement accounts.

  • Provide necessary information: Share all relevant details about your previous employment and retirement accounts.

  • Get expert help: A financial advisor can use their expertise and resources to help you locate and consolidate your retirement accounts.

What to Do After Finding Your Account

Once you’ve successfully tracked down your unclaimed retirement account, the next steps are crucial to ensuring your funds are managed effectively. Here’s a detailed guide on what to do after finding your unclaimed retirement benefits:

1. Roll Over Your Account

Consider rolling over a retirement account into a current 401k plan or a new individual retirement account (IRA) so you have more flexibility and can perhaps combine with other retirement funds. IF you roll over to an IRA, it can be either a traditional IRA or a Roth IRA, depending on your financial goals and tax situation.

Steps:

  • Choose an IRA provider: Look for a provider with low fees and a wide range of investment options. 

  • Initiate the rollover: Contact your chosen IRA provider to start the rollover process. They will guide you through the necessary paperwork and steps.

  • Transfer funds: Ensure that the transfer is done as a direct rollover to avoid any tax penalties. The funds will move directly from your old account to the new IRA without you having to take possession of the money.

2. Evaluate Investment Options

Once your funds are in the new IRA or 401(k), take the time to evaluate the investment options available. The goal is to grow your retirement savings while balancing risk.

Steps:

  • Assess your risk tolerance: Consider your age, retirement goals, and how much risk you’re willing to take. Younger individuals can generally afford to take more risks, while those closer to retirement might prefer more conservative investments.

  • Diversify your portfolio: Spread your investments across different asset classes (stocks, bonds, mutual funds, ETFs) to reduce risk.

  • Monitor and adjust: Regularly review your portfolio’s performance and make adjustments as needed to stay on track with your retirement goals.

3. Consider Tax Implications

Understanding the tax implications of your rollover and future withdrawals is essential.

Steps:

  • Consult a tax professional: They can provide personalized advice based on your financial situation and ensure you’re making tax-efficient decisions.

  • Understand Roth vs. Traditional IRAs: Roth IRAs are funded with after-tax dollars, so qualified withdrawals in retirement are tax-free. Traditional IRAs are funded with pre-tax dollars, and withdrawals are taxed as ordinary income.

  • Plan for Required Minimum Distributions (RMDs): For traditional IRAs, you must start taking RMDs at age 73. Failing to do so can result in hefty tax penalties.

4. Keep Thorough Records

Maintaining detailed records of your retirement accounts is vital for future reference and ease of management.

Steps:

  • Document account details: Keep a record of account numbers, contact information for the plan administrator, and statements.

  • Update beneficiaries: Ensure your beneficiaries are up-to-date to avoid any complications in the event of your passing.

  • Review annually: At least once a year, review your retirement accounts to ensure everything is in order and aligned with your retirement strategy.

5. Seek Professional Advice

If managing your retirement accounts feels overwhelming, consider seeking advice from a financial advisor. They can help you create a comprehensive retirement plan and provide ongoing support.

Get your FREE Retirement Plan Review today!

Steps:

  • Find a reputable advisor: Look for a certified financial planner (CFP®) with good reviews and a fiduciary duty to act in your best interest.

  • Discuss your goals: Clearly communicate your retirement goals and any concerns you have.

  • Develop a strategy: Work with your advisor to develop a personalized strategy that maximizes your retirement savings and meets your financial needs.

What Happens If You Don’t Claim Your Account?

If you don’t claim your unclaimed retirement account, several things can happen depending on the circumstances and the specific policies of the retirement plan. 

  1. Held by the Unclaimed Property Department: If your retirement account has been turned over to a state’s unclaimed property office, it will stay there until someone claims it. The rightful owner or their heirs must claim the account to access the funds. These funds remain in the unclaimed property office indefinitely if left unclaimed, awaiting a legitimate claim.

  2. Inheritance and Heir Claims: In the event of the account holder’s death, the beneficiary (or, if no beneficiary, the heirs) may be able to claim the account. However, if the beneficiary or heirs do not claim it, the account remains in the unclaimed property department as long as allowed by state law. This means that the money may be preserved for a considerable time, but may not be earning any interest or gains.

  3. Plan Liquidation: The duration that your money stays in your company’s retirement plan can vary by company and account balance. If the company is terminating the plan, you may need to make a quick decision about your funds. If no action is taken, the account could convert to cash quickly. If your account balance is less than $1,000, the company retirement planis allowed to cut you a check for the amount and close your account, which might not be ideal due to potential tax implications.

  4. Growth of Funds: As long as the money is in a 401(k) or similar retirement plan, it can continue to grow through investments. However, if the account converts to cash (which can happen if the account is unclaimed and the company decides to terminate the plan), it will no longer earn compound interest. The value of your account will be fixed as cash and will not be subject to market fluctuations, which can be either positive or negative depending on market conditions.

  5. Required Minimum Distributions (RMDs): Once you reach the age of 73, you must begin taking required minimum distributions (RMDs) from traditional IRAs and most employer-sponsored retirement plans. Failure to claim your account and take the RMDs can result in significant tax penalties. It’s essential to manage these accounts proactively to avoid any unnecessary penalties.

Key Takeaways

  • It's easy to lose track of retirement accounts when changing jobs.

  • Start by contacting your former employers and plan administrators.

  • Use the DOL resources and unclaimed property websites if initial searches don't help.

  • Consolidate your accounts into an IRA to keep track of your retirement savings.

Bottom Line

Finding unclaimed retirement benefits might require some effort, but it’s worth it to secure your financial future. Start your search today, and ensure your hard-earned money is working for you.

Ready to take control of your financial future? Connect with a CERTIFIED FINANCIAL PLANNER™ at One Advisory Partners today. Our expert advisors are here to help you locate your unclaimed retirement benefits, consolidate your accounts, and create a comprehensive retirement plan tailored to your unique goals.

Don't let your hard-earned money go unclaimed. Schedule a consultation with One Advisory Partners and secure your financial well-being for the future. 

Get your FREE Retirement Plan Review today!

Reference

https://www.pbgc.gov/wr/find-unclaimed-retirement-benefits

https://unclaimedretirementbenefits.com/

https://unclaimedretirementbenefits.com/

https://www.investopedia.com/unclaimed-retirement-benefits-5443077

https://www.latimes.com/business/story/2023-10-15/you-might-have-unclaimed-retirement-benefits-how-to-find-them