Nearly 3 Million 401(K) Accounts Are Lost Every Year. What if Yours Is One of Them?

In the whirlwind of changing jobs, some things can slip through the cracks. You've offboarded, onboarded, elected benefits, and maybe even relocated. But have you left your retirement account behind? If so, the consequences could amount to hundreds of thousands of dollars by retirement.

Read on to learn more about the true cost of a lost 401(k) account, and how to find yours.

A $1.65 trillion problem

The value of lost retirement accounts is in the trillions of dollars, but the opportunity cost of those forgotten funds could be much, much more. Every dollar counts when building retirement savings, and leaving money behind can put a dent in your nest egg.

Even if you remember to reclaim an old 401(k) when you retire, what happens before then matters, too. Even if they're invested today, 401(k) assets don't always stay that way. In some cases, such as when the account has a small balance or a company goes belly-up, your retirement assets could be converted to cash. And if those funds stay that way for decades, you could lose the saving superpower of compounding returns.

In America, 401(k) savings amount to nearly $8 trillion, meaning about one-fifth of 401(k) dollars are in lost accounts. And while Social Security benefits may be enough to cover retirement for some, many retirees tap into their retirement accounts to fill the gap between their benefits and their spending. When funding retirement, missing a 401(k) account can be like missing a puzzle piece.

How to find a lost 401(k)

Luckily, there are ways to track down lost retirement accounts, but the process is not always easy. You can think of finding an old 401(k) account as the world's least fun scavenger hunt. However, time is of the essence, so it's important to track down lost accounts as soon as possible.

The first place to start when looking for an old 401(k) plan is with your old employer. The human resources department of your old company may be able to help locate your account, or at least point you in the right direction. Other options include getting in touch with the last known custodian of your plan, or looking for your employer's plan through the Department of Labor's Form 5500 search engine.

If you can't get in touch with your old employer or find your old retirement plan, you have a few options. One option is to search for unclaimed property with your state government, a process that can usually be done online. A variety of paid services can also help you find a lost account.

What's next?

It typically makes sense to reinvest reclaimed retirement accounts. When investing for retirement, prioritize a diversified portfolio that reflects your risk tolerance and time horizon. If your 401(k) balance has transferred as shares instead of dollars, be sure to re-evaluate the suitability of those investments when they are rolled over.

Ensure you preserve the tax-advantaged status of your retirement savings by rolling funds into another qualified retirement account. Assets can be moved to a new employer's plan or even to an individual retirement account (IRA). Pay attention to any Roth dollars in your account, as they must be moved to a Roth IRA or 401(k) that supports Roth contributions.

When left behind at an old employer, 401(k) accounts can poke a hole in your retirement plan. Finding a lost 401(k) is easier said than done, but try contacting your old employer, custodian, or your state government. And be sure to keep your funds invested and tax advantaged by moving them into another qualified retirement plan, such as an IRA.