There's Over $1.35 Trillion in Forgotten Retirement Accounts. Might Some of It Be Yours?

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Leaving a job can be a stressful experience, whether it happens because of a layoff or a deliberate switch to a new role. In addition to the strain involved in job loss or starting a new position, there are a lot of things to keep track of. These include your health insurance, other work benefits, and retirement account.

We’re all human and it’s easy for things to slip between the cracks. Which goes some way to explain the $1.35 trillion sitting in forgotten 401(k)s — workplace retirement plans — as of May last year. According to research by Capitalize, there are over 24 million forgotten accounts, with 2.8 million more left behind every year. That’s a lot of money.

How 401(k)s get left behind

If your company has a 401(k), you can automatically contribute a portion of your paycheck, which is often matched by a contribution from your employer. That can make them an excellent way to save for your old age and, ultimately, build wealth. But there’s one big drawback: People change jobs.

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When you move to a new job you have a few 401(k) options, depending on how much cash we’re talking about. You can leave the money where it is, roll it into your own individual retirement account (IRA), or move it to your new employer’s 401(k). You can also cash it out, but that can be a costly move. A lot of people opt to leave the money in their current employer’s plan, and sometimes then forget about it altogether.

In addition to getting lost, leaving your retirement savings with an old employer can get complicated over time. For example, the company may close or switch fund providers, and you wouldn’t know about it. If you’re not actively managing your retirement savings, the cash could wind up in an account that isn’t generating competitive returns, and/or one that charges high fees.

While there are no guarantees when investing in the stock market, a well-managed fund can generate returns that more than cover its fees. Plus, the combination of compound interest and time can make a significant difference. Let’s say you leave $5,000 in a retirement account and it averages annual returns of 8%, which is below the average from the S&P 500. In 20 years, that $5,000 could be worth over $20,000.

In contrast, a poorly allocated fund may stagnate, particularly if the fees are high. If that $5,000 were left in a fund generating returns of 3%, it would be worth around $9,000 in 20 years. It would be less if you take fees into account. When it comes to your retirement funds, it’s worth spending a little time to make sure your nest egg is in the right place.

How to track down your forgotten 401(k)

If you think you might have cash in a forgotten retirement account, there are steps you can take to find it. Your first stop might be to look through old emails and paperwork to find out if you’ve got any record of the contributions you made. If this doesn’t work, maybe reach out to your old employer and ask them to check if you participated in their 401(k) scheme and get details of the account.

It can be a valuable exercise. To give you an example, I participated in an employer retirement scheme in my 20s. I only held the job for a few years and have freelanced for much of the rest of my career. When I changed jobs, I switched the money, which was less than $5,000, to an IRA and left it there. The magic of compound interest means it’s worth over $30,000 today.

However, it isn’t always easy to track down your lost 401(k) money. If you’ve held several jobs, you may not remember which ones (if any) had 401(k) schemes, never mind the details. There are several different databases, including,, and You may have to trawl through several before you find your money.

The good news is that more help is on the way. There’s been a lot of talk about the new Secure 2.0 legislation, which makes sweeping changes to several aspects of our retirement savings. One lesser-known provision is the commitment to set up a database of lost 401(k)s. Also known as the “Retirement Savings Lost and Found”, it’s slated to be finished at the end of next year. It will make it easy for anyone to track down their lost retirement money.

Bottom line

If you think you have money in a forgotten 401(k) account, don’t wait until the Lost and Found database is up and running to track down your lost funds. The sooner you find out where it is, the sooner you can make it a part of your broader retirement plan — and put it in an account where it has the best chance of performing well.


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