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Lost track of an old 401(k)? Your savings may be slipping away
USA Today • • business
Key Points:
- Automatic rollover IRAs, created when employers move small 401(k) balances (under $7,000) after a worker leaves, often remain in low-interest cash accounts that lose value over time due to fees and minimal growth.
- A PensionBee study found that 68% of these rollover IRAs declined in value after one year, and 39% were still worth less than their original balance after eight years.
- The number of automatic rollovers is expected to double by 2030, potentially leaving 13 million accounts with $43 billion trapped in accounts that do not grow as intended for retirement savings.
- These accounts disproportionately affect younger workers who change jobs and addresses frequently, making it easy to lose track of their retirement funds.
- Experts advise former employees to check for old 401(k) accounts, especially if they left a job with a balance under $7,000, have moved recently, or received mail from unfamiliar IRA providers, to avoid losing retirement savings to fees and low returns.
