Switching jobs pulls your take care in several directions at once, and it ‘s comfortable for your old 401 ( kelvin ) to get lost in the shuffle. But you ca n’t afford to forget about it for good. Building a nest egg to sustain you for decades is tough, so you ca n’t afford to leave any old retirement accounts behind. If you ‘ve lost track of your old 401 ( k ), take these steps to find it and put that money to good habit .
Contact former employer
Contacting your erstwhile employer is the fastest way to find your honest-to-god 401 ( thousand ). The company ‘s HR department should have records of your retirement account and can advise you on how to access it or roll it over if that ‘s what you decide to do. More on that downstairs .
Look for contact information
If you do n’t know how to contact your former employer — possibly the company no long exists or it was acquired or merged with another company — see if you have any old 401 ( kilobyte ) statements. These should have contact data to help put you in touch with the design administrator .
If you do n’t have an old 401 ( kilobyte ) statement handy or yours does n’t tell you what you need to know, visit the U.S. Department of Labor web site and look up your employer. There you should find your honest-to-god retirement account ‘s tax return, known as form 5500. That will most probably have contact data for your 401 ( kelvin ) ‘s plan administrator.
Search for unclaimed retirement benefits
When all else fails, search for yourself in the National Registry of Unclaimed Retirement Benefits. not all employers participate in this service, but many do because it provides benefits that help them meet their legal requirements. It ‘s a release service, and it merely requires your social Security number .
What to do with your old 401(k)
once you ‘ve found your old 401 ( k ), you have to decide what to do with it. There are three options, which are explained in detail below .
Option 1: Leave it where it is
You do n’t have to move the money out of your old 401 ( thousand ) if you do n’t want to. You wo n’t ever lose the funds — provided you do n’t lose track of your old history again. But this choice is normally the least desirable .
For one, it ‘s more unmanageable to manage your retirement savings when they ‘re spread out over many accounts. You besides get adhere paying whatever your old 401 ( potassium ) ‘s fees were, and these can be higher than what you ‘d pay if you moved your money to an person retirement account, for case .
But if you like your plan ‘s investment options and the fees are n’t besides high, you could consider leaving your old 401 ( thousand ) funds where they are. Just make careful note of how to entree them again so you do n’t forget .
Option 2: Move the money to your new 401(k)
If you have a newly problem with a raw 401 ( thousand ), your current employer may permit you to roll over your erstwhile 401 ( kilobyte ) funds into your modern account. however, not all plans allow this, so check with your company ‘s HR department or plan administrator to see if it ‘s an option for you.
If it is and you decide it ‘s your best move, you must choose between a address and an collateral rollover. direct rollovers are the better option because you do n’t handle the money at all. You precisely fill out a form telling your old plan administrator where to send the funds and they take care of it for you .
With an indirect rollover, the plan administrator cuts you a check for the funds in your account and you place that money into your new report. But if you fail to do this within 60 days of cashing out your old account, the government considers it a distribution and taxes you on that money for the year .
Before you decide to move your money to your new 401 ( kelvin ), make surely you like your investing options and are comfortable with the fees your new 401 ( k ) charges. many employers do n’t allow you to transfer money out of your 401 ( kilobyte ) if you ‘re a current employee, so once you transfer your old 401 ( kilobyte ) funds to your modern account, they could be stuck there, at least until you leave your current subcontract .
Option 3: Move the money to an IRA
If you ‘re not able to transfer the funds to your current 401 ( potassium ) or you do n’t want to, you can roll over the funds to an IRA alternatively. The process is the same as doing a rollover to a newfangled 401 ( kilobyte ), and you still have the choice between a conduct or indirect rollover .
You ‘ll need to set up a new IRA with any broker if you do n’t already have one. Make sure you choose an IRA that ‘s taxed the same direction as your erstwhile 401 ( k ) funds. Most 401 ( thousand ) s are tax-deferred, which means your contributions reduce your taxable income in the year you make them, but you pay taxes on your withdrawals in retirement. You want a traditional IRA in this lawsuit because the government taxes these funds the lapp way .
If you had a Roth 401 ( thousand ), you want a Roth IRA. Both of these accounts give you tax-exempt withdrawals in retirement if you pay taxes on your contributions the year you make them.
In most cases, losing traverse of your previous 401 ( kelvin ) does n’t mean the money is gone for good. But finding it is only half the challenge. You must besides decide where to keep those funds going forward so they ‘ll be most useful to you. Think the decision through cautiously, then follow the steps above .