When leaving a job, an employee is likely to take their favorite mug and desk plant, but what about their 401(k)? According to RIABiz, around 25% of all 401k plans were unclaimed as of 2023. Leaving these retirement accounts behind without any plan to remember that they even exist can create a host of financial issues for their future selves.

If keeping the funds invested in a retirement account is desired, an employee generally has three options for their 401(k) when leaving a job:

1. Leave it with their former employer. While this is the easiest option, they might face limited investment options, forget where the account is located or what it is invested in, and have difficulty getting a clear picture of their overall financial portfolio.


2. Roll it over to their new employer’s plan. If their new employer offers a 401(k), rolling their previous employer’s plan to their new employer’s plan can keep things consolidated, simplify financial planning, and eliminate one additional account for their beneficiaries to track down in the event they pass away unexpectedly.


3. Roll it over into an IRA. An Individual Retirement Account (IRA) can provide more investment choices and allow for professional management if desired.

To avoid losing track of your 401(k), make it a priority to decide what to do with your account as soon as you leave a job. If you are unsure which option is best for you, consider consulting with a financial advisor to create a strategy that aligns with your long-term goals.

Don’t let your 401(k) add to the statistic of forgotten 401(k) accounts!

This material is being provided for informational or educational purposes only. Those seeking information regarding their particular investment needs should contact a financial professional. The opinions expressed were current as of the date of posting but are subject to change without notice due to market, political, or economic conditions.

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