Do you have money in “orphan” accounts?

Investing_moneyDo you have accounts scattered all over? How about old retirement plans at employers you don’t work at anymore? Amazed that people forget about money they’ve saved? You would be surprised at how many people have forgotten about investments accounts (when they change their address they forget to tell the investment company) and/or retirement plans at old employers. This leads to lots of unneeded complexity in your management of your investments:

  • risk of losing track of the assets – how do you keep track of all those accounts? – more importantly how can they keep track of you when you change your address?
  • risk the allocations have nothing to do with your current situation and so aren’t appropriate anymore.
  • risk heirs won’t know about the assets (they need to notify the company when the retirement plan owner (you) passes away to receive the money you said they inherited (how do they find the money?).
  • risk of IRS and State penalties if forgotten assets are not included in the post 70 1/2 Required Minimum Distribution rules.
  • and many more problems.

What to do with those forgotten retirement plans and/or other investment/savings accounts you have scattered all over? Find them – and consolidate them in your current employer’s plan if rules allow, or at a minimum into an IRA! How can you locate forgotten old retirement plans? Here’s a great aide to walk you through that process. By 401(K) 2012 [CC-BY-SA-2.0], via Wikimedia Commons

About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

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2 Responses to Do you have money in “orphan” accounts?

  1. Larry Frank, Sr. September 20, 2016 at 11:19 am #

    Because Americans change employers so often, they tend to end up with 401k, or other similar employer sponsored retirement plans, scattered all over the place. You should consolidate them into a single IRA, or at least continue to transfer them into your current employer’s plan (if they accept transfers).

    Lost track? Here’s another source to find them:
    http://www.bloomberg.com/news/articles/2016-09-19/lost-track-of-an-old-401-k-here-s-a-plan-to-help-you-find-your-money

  2. Larry Frank, Sr. September 20, 2016 at 11:24 am #

    Here’s an FAQ from DOL on questions you may have about finding lost retirement plans you may have had (and you may receive a letter from Social Security saying you may have such lost plans – please verify first that the letter is legitimate before you start handing out your personal information requested in such a letter).

    https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/ssa-potential-private-benefit-information-notice.pdf

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