Retirement Savings 'Lost and Found': A New Resource for Older Workers and Retirees
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Many older workers and retirees who have lost track of their retirement savings from previous employers may now have a new resource to help them reunite with those funds. The U.S. Department of Labor (DOL) has launched a 'Retirement Savings Lost and Found' database, which has already helped some individuals reconnect with their lost retirement funds.
Since its launch in late December 2024, the database has received 236,269 unique visitors. According to data provided to CNBC by the DOL, about 29.5% of these visitors, or 69,712 people, found an old 401(k), pension, or other workplace retirement plan associated with their Social Security number. However, the database currently only includes information for individuals aged 65 or older.
Samuel Krause, a partner with Hall Benefits Law in Los Angeles, notes that while the DOL doesn't track the outcome after the information is provided, there's a good chance that many users were reconnected with their lost retirement funds. Krause suggests that the database may not yield significant financial gains, but for those who found positive results, it's likely that they discovered old accounts.
Job switching can lead to forgotten retirement accounts.
As workers change employers, it's common for multiple 401(k) accounts or other retirement benefits to be left behind, either intentionally or accidentally. The typical U.S. worker holds about 13 jobs between ages 18 and 58, according to the Bureau of Labor Statistics. Research from Capitalize estimates that 31.9 million 401(k) accounts remain with former employers, totaling around $2.1 trillion.
It's important to note that if your balance is under $7,000 when leaving a company, your employer may roll over your balance to an IRA if you don't take action. If the balance is under $1,000, the plan may cash it out and send you a check. Regular job switching can make it challenging to track retirement savings, leading to multiple accounts that are overlooked during retirement planning.
Certified financial planner Melissa Caro emphasizes the importance of treating old retirement accounts like missing puzzle pieces, stating that accurate planning is impossible without knowing what you own.
The DOL's database is a result of the Secure 2.0 retirement legislation, signed into law in December 2022, which mandated the creation and maintenance of this database to assist workers in locating forgotten retirement accounts.
However, the age-65 threshold limits its usefulness for younger workers who have lost track of accounts with previous employers. The DOL plans to broaden the database's scope, as indicated in its semiannual agenda, making it more accessible to a wider age range.
For those who cannot currently benefit from the DOL database, other avenues exist. The Pension Benefit Guaranty Corporation's Missing Participants Program assists individuals whose plans have terminated, while state unclaimed property programs can also be used to search for old retirement accounts, security deposits, bank accounts, and other financial property.
The DOL's database is a valuable resource for older workers and retirees, but its usefulness will expand over time, providing a comprehensive solution for those seeking to reconnect with their lost retirement savings.
