Do You Have a Missing Retirement 401 K Plan?
Between 2004 and 2013, 401 K plans failed to connect approximately 25 million retirement accounts with their employee owners. Said another way, there are approximately 25 million people missing their 401 K Plans and most probably do not know it.
Most of the time, this is a result of switching from one job to another. The employee knows it is out there somewhere. However the 401 K plan can no longer locate the employee.
This article estimates that 16 or the 25 million abandoned retirement accounts contain $5,000 or less. The total of all missing accounts totals somewhere in the $8.5 trillion dollar range.
Now, there are numerous reasons why this happens. Regardless of the reason, the point is that it never should have happened in the first place. I think the bottom line is that one of the first things you do when leaving a job is either roll your old 401 K plan over to a new employer 401 K Plan or to an IRA. Never leave the money. There are too many mistakes that can take place.
If you feel like you are one of the 25 million investors, go and check www.claimittexas.org. They might have turned it over to the state of Texas as abandoned property.
Keep in mind, that if you leave less than $5,000 in an old employer 401 K plan, the employer does not need your consent to cash it out. They can close the 401 K plan and send you the money causing a penalty (if you under the age of 59 1/2) and income taxes owed.