Time passes quickly, and it can be easy to misplace important documents, like 401(k) details from a previous employer. Yet, these funds are vital to retirement planning and calculating your net worth. Or, perhaps you’re the surviving spouse or child trying to track down an estate benefit. Thankfully, not all hope is lost. Here are the steps you can follow to find an old 401(k).
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Start your search by visiting the website of the 401(k) plan provider. You may be able to provide your name, birth date, and email address to reset your login information. This process may also require contacting customer support to verify your identity and complete any additional steps. Here are links to the three most significant 401(k) providers:
2. Ask Your Former Employer
If your former employer is still active, you can also contact their HR department to inquire about your workplace retirement fund. After all, this was a workplace benefit, and they should have records about your plan information to help guide you in the right direction.
3. Look Up Form 5500
When going to the 401(k) brokerage or your former employer is a dead end, you can try searching for Form 5500 on the Department of Labor (DOL) website. Employee benefit plan providers must file a Form 5500 each year listing the number of enrollees, plan sponsor, and eligible products. The DOL Form 5500 search tool lets you sift through reports as far back as January 1, 2010. Your search filters include:
- Plan name
- Plan sponsor
- Employer Identification Number (EIN)
- Plan number (PN)
- Acknowledgment ID (ACK ID)
This service can help you find the plan administrator. Next, you can contact the administrator to start your next homework problem.
4. Check Unclaimed Property Databases
Unclaimed property databases can help you find abandoned financial accounts and reimbursements that are yours when the provider can’t find your new contact information. Each state operates a property database, and you can enter your name to search.
After finding any unclaimed property, you can follow the steps to get your money. It’s free to search using a website like the National Association of Unclaimed Property Administrators. You will also avoid phishing scams that appear when doing a basic google search for your state’s database.
Tip: Imposter sites may ask for your Social Security number and other personal details. You may need to enter your (previous) street address on legit sites to find relevant matches. The advanced search features can be helpful if you have a common last name like Smith or Jones.
You can also use Credit Karma to look for unclaimed property for free. This service also offers free credit score monitoring and identity monitoring. For more information, check out our full Credit Karma review. In addition to potentially finding your old 401(k), you may also be eligible for these products:
- Security deposits
- Safety deposit box contents
- Insurance benefits
- Savings bonds
- Dividend payments
- Tangible property (i.e., collectible coins, jewelry, stamps)
What To Do with Your Old 401(k)
After taking back your 401(k), you have several options to repurpose the funds, including a rollover IRA, a Roth IRA conversion, and consolidating, updating, or cashing out your 401k. Let’s take a closer look at each one.
Your best option may be to request an IRA rollover through a prominent online brokerage to give your portfolio new life. For example, you can begin making contributions again and avoid the annual administrative fees. You can also invest in any stocks or funds available through the broker instead of choosing from a narrow list of funds. Your pre-tax traditional 401(k) becomes a conventional IRA by default. Likewise, your Roth 401(k) becomes Roth IRA. As a result, you most likely won’t have to pay any transfer fees or taxes. Here are some of the best rollover IRA benefits:
- You can choose your investments
- Can add multiple 401(k)s
- Accepts ongoing IRA contributions
- No annual maintenance fees
A rollover IRA is similar to a brand-new traditional IRA, yet your rollover amount doesn’t count against the annual IRA contribution limits. Some online brokers offer IRA rollover promotions offering bonus cash. After rolling over your 401(k)s, you can contribute new money each year to save more for retirement.
Tip: To avoid selling certain investments because your new broker doesn’t support that mutual fund or stock, you may use the same broker and not lose your original cost basis. Thankfully, position liquidations don’t result in a taxable event as you’re not withdrawing any money.
Convert to a Roth IRA
If your old 401(k) is funded with pre-tax dollars, you may decide to convert it into a Roth IRA. You will pay income taxes on the conversion amount but can make tax-free withdrawals in retirement. Despite the upfront tax hit, this conversion doesn’t count against your IRA contribution limits. In addition, you’re no longer subject to required minimum distributions (RMDs). There are two different ways to convert your 401(k).
Direct Roth IRA Conversion: Your Quickest Option
The easiest way is to see if your IRA provider can directly transfer your traditional 401(k) balance to your Roth IRA. If you don’t want to convert the entire amount, see if your 401(k) administrator supports two direct transfers. If so, your second transfer rolls your remaining balance into a traditional rollover IRA. These funds won’t incur a tax charge until you schedule a distribution or convert them into a Roth later.
Indirect Roth IRA Conversion: The Time-Consuming Way
If you cannot make two direct transfers, you must first rollover your 401(k) to a traditional IRA. Then, you must wait at least 60 days before requesting a Roth conversion for your desired balance.
Tip: You may decide to keep a traditional IRA if you’re nearing retirement, as a Roth conversion resets the early withdrawal clock. Unfortunately, current tax rules require waiting five years before taking penalty-free withdrawals from your new account, even if you’re at least 59 ½ years old.
Your current employer may let you absorb your old workplace retirement plans with your active account. However, not every 401(k) plan accepts outside methods. Some of the advantages of a 401(k) consolidation include:
- Your retirement funds are in one place
- Can make asset allocation and future withdrawal planning easy
- Get access to potentially better investment options
This option can be better if you don’t want to self-manage a 401(k) and an IRA. Before consolidating, determine if your annual fees will increase. Your current 401(k) administrator may use a percentage-based pricing model, and a higher balance increases your custodian fees. To avoid fees, you may decide to open a rollover IRA with the same brokerage to have similar investment options. You can also invest in other stocks and funds that are not part of your employer’s plan.
Keep Your 401(k) (But Update It)
If you’re happy with your current asset allocation or plan administrator, you may decide to keep your 401(k) where it is. It might be your best option if you plan to withdraw the balance soon in retirement. While you can’t contribute new money as you’re no longer an active employee, you can rebalance your portfolio.
Tip: A service like Blooom can provide a free portfolio analysis. Then, their paid plans can help recommend a personalized portfolio asset allocation and offer financial advisor access. See our full Blooom review here. Remember that your plan administrator is most likely collecting an annual administrative fee that erodes your portfolio performance and remaining balance.
Cash It Out
Your final option can be cashing out your 401(k). This option can make sense if you’re at least 59 ½ years old and can avoid the 10% early withdrawal penalty, or if you need the cash for a necessary expense and are willing to pay the withdrawal penalties.
Your distributions will depend on your income tax bracket and a 10% early withdrawal penalty. Anticipate giving the first 30% of your distribution to the taxman. The IRS lists some of the ways you can avoid the early tax penalty, including:
- You’re a beneficiary or estate of the deceased 401(k) owner
- First-time home purchase (up to $10,000 is exempt)
- Higher education expenses
- Unreimbursed medical expenses
- Child adoption
Hopefully, you won’t need to spend much time finding your old 401(k), and you can utilize the fund to improve your financial stability. However, remember that the account is legally yours, so it’s important to claim it, even if it sat for years or decades.