How to see if you have 401k

What Is a 401(k)?

A 401(k) is an employer-sponsored retirement plan enabling workers to save money in a tax-deferred way. Often employers will match contributions up to a percentage of salary. It’s just like any other retirement plan in the sense that you’re trying to save money and reduce taxes as you do it. Like an IRA, you will pay taxes once you start taking withdrawals in retirement.

If you opted for it when you were hired, every paycheck a percentage of your salary (say, 3%) is taken out and put into a 401(k) retirement account. Your employer may add some more money, maybe even the same amount, on top of that. That money is usually invested, and has been accumulating. How much is in there?

There are different types of 401(k)s. A Roth 401(k) operates much in the same fashion as a Roth IRA. While still employer-sponsored, it uses after-tax income to fund itself, so you pay the taxes now, and not later in retirement. While one can deliberate the merits of which to use, the general consensus is that a Roth format is useful if one believes they will be in an higher tax bracket later in life when withdrawing from their retirement accounts. 

Conversely, a traditional 401(k) advocate might argue that the ability to put more money into an account in the beginning and through time, allows the saver to make the most of compound interest. 

One of the advantages of a 401(k) over an IRA is the amount of contributions you can make in a year. For 2020, that limit is $19,500. That's an advantage over an IRA, which allows much smaller contributions. One drawback of a 401(k) is that it is held in an account managed by the company chosen by your employer, and likely has a limited selection of investments. Many, for instance, will be invested in the company that you work for. While that can be great if you work for Berkshire Hathaway  (BRK.A) - Get Free Report, it doesn't always allow for much diversification. 

To start saving for retirement in a 401(k), all an employee has to do is sign up for a 401(k) plan with their employer (usually the first day or so on the job), choose what percent of their paycheck to contribute, pick their investment vehicles, and the employer takes care of the rest. It's a good idea to talk to a financial adviser first, before making any 401(k) plan investment selections.

Read more about how a 401(k) works in this article from TheStreet.

How to Check Your 401(k) Balance

If you already have a 401(k) and want to check the balance, it's pretty easy. You should receive statements on your account either on paper or electronically. If not, talk to the Human Resources department at your job and ask who the provider is and how to access your account. Companies don’t traditionally handle pensions and retirement accounts themselves. They are outsourced to investment managers.

Some of the largest 401(k) investment managers include Fidelity Investments, Bank of America  (BAC) - Get Free Report, T. Rowe Price  (TROW) - Get Free Report, Vanguard, Charles Schwab  (SCHW) - Get Free Report, Edward Jones, and others.

Once you know who the plan sponsor or investment manager is, you can go to their website and log in, or restore your log-in, to see your account balance. Expect to go through some security measures if you do not have a user name and password for the account. 

Much of this should be covered when you initiate the 401(k) when you are hired or when the retirement account option becomes available to you. Details like contributions, company matching, and information on how to check your balance history and current holdings should be provided. 

Finding a 401(k) from a job you are no longer with is a little different. 

Say you leave your job and start a new one. You didn’t rollover your retirement into an IRA. That money doesn’t disappear. It's still there, it still belongs to you. To get it, contact HR at your former employer. If it’s been a recent move, it shouldn’t be too hard to track it down. If it's been a while, it helps to have identification and old account statements to show.

Read more on TheStreet about how to find an old 401(k) account. 

There are billions of dollars sitting unclaimed in ghosted workplace retirement plans. And some of it might be yours if you’ve ever left a job and forgotten to take your vested retirement savings with you.

But no matter how long the cobwebs have been forming on your old 401(k), that money is still yours. All you have to do is find it.

How do I find my old 401(k)?

If you're not sure where your old 401(k) is, there are three places it could likely be. Here's where to find your old 401(k):

1. Right where you left it, in the old account set up by your employer.

2. In a new account set up by the 401(k) plan administrator.

3. In the hands of your state’s unclaimed property division.

Here’s how to start your search:

1. Contact your old employer about your old 401(k)

Employers will try to track down a departed employee who left money behind in an old 401(k), but their efforts are only as good as the information they have on file. Beyond providing 30 to 60 days notice of their intentions, there are no laws that say how hard they have to look or for how long.

If it’s been a while since you’ve heard from your former company, or if you’ve moved or misplaced the notices they sent, start by contacting your former company’s human resources department or find an old 401(k) account statement and contact the plan administrator, the financial firm that held the account and sent you updates.

If there was more than $5,000 in your retirement account when you left, there’s a good chance that your money is still in your workplace account. You may be allowed to leave it there for as long as you like, until you’re age 72, when the IRS requires you to start taking distributions, but you might not want to. Alternatively, you could do a 401(k) rollover to move that money into another retirement account.

Plan administrators have more leeway with abandoned amounts up to $5,000. If the balance is $1,000 or less, they can simply cut a check for the total and send it to your last known address, leaving you to deal with any tax consequences. For amounts more than $1,000 up to $5,000, they're allowed to move funds into an individual retirement account without your consent. These specialty IRAs are set up at a financial institution that has been federally authorized to manage the account.

The good news if a new IRA was opened for the rollover: Your money retains its tax-protected status. The bad: You have to find the new trustee.

2. Find your 401(k) with your social security number

If the old plan administrator cannot tell you where your 401(k) funds went, there are several databases that can assist. You can use your Social Security number to find your lost 401(k) by popping it into some of the databases below.

National Registry of Unclaimed Retirement Benefits

The National Registry of Unclaimed Retirement Benefits works like a “missed connections” service where companies register with the site to help facilitate a reunion between ex-employees and their retirement money. Not every company is registered with this site, so if none of these searches yields results, move on to the next step.

Department of Labor's abandoned plan database

Another good place to start is with the Department of Labor’s abandoned plan database. It's provided by the Employee Benefits Security Administration. The tool helps you find out if you have a plan that's terminated, or is in the process of being terminated. You can also figure out who is doing the terminating in case you need to contact them directly.

U.S. Pension Guaranty Corp. database of unclaimed pensions

If you were covered under a traditional pension plan that was disbanded, search the U.S. Pension Guaranty Corp. database of unclaimed pensions. You'll need to provide your name, address, Social Security number, the employer’s name, and the dates you worked for the company, as well as your contact phone number.

FreeErisa

FreeErisa, an employee benefit data resource, also maintains a rundown of employee benefit plan paperwork. Users can sign up for free, but may have to pay for advanced search tools.

3. Search unclaimed property databases

If a company terminates its retirement plan, it has more options on what it’s allowed to do with the unclaimed money, no matter what the account balance.

It might be rolled into an IRA set up on your behalf, deposited at a bank, or left with the state’s unclaimed property fund. Hit up missingmoney.com, run in part by the National Association of Unclaimed Property Administrators, to do a multistate search of state unclaimed property divisions.

Note that if a plan administrator cashed out and transferred your money to a bank account or the state, a portion of your savings may have been withheld to pay the IRS. That’s because this kind of transfer is considered a distribution (aka cashing out) and is subject to income taxes and penalties. Some 401(k) plan administrators withhold a portion of the balance to cover any potential taxes and send you and the IRS tax form 1099-R to report the income. Others don’t, which could leave you with a surprise IRS IOU to pay.

What to do with an old 401(k)

You might be able to leave your old 401(k) money where it is if it’s in your former employer’s plan. One reason to do so is if you have access to certain mutual funds that charge lower management fees available to institutional clients — like 401(k) plans — that aren’t available to individual investors. But you’re not allowed to contribute to the plan anymore since you no longer work there.

Reasons to move your money to an IRA or to roll it into a current employer’s plan include access to a broader range of investments, such as individual stocks, a wider selection of mutual funds, and more control over account fees.

If your money was moved into an IRA on your behalf, you don’t have to — and probably shouldn’t — leave it there. Once you find your money, it’s easy to switch brokers and move your investments into a new IRA of your choosing without triggering any taxes.

Unless you enjoyed this little treasure hunt, the next time you switch jobs, take your retirement loot with you.