A recent report sheds light on the growing problem of unclaimed 401(k) accounts and the significant financial impact they can have on workers' retirement savings. With increased job mobility, many Americans are leaving behind 401(k) plans with previous employers, often forgetting about them or failing to properly manage them. These 'forgotten' accounts can be subject to fees that erode savings over time.
The report emphasizes that even seemingly small fees can accumulate significantly over the long term, costing workers thousands of dollars in potential retirement income. Furthermore, unclaimed 401(k)s may not be optimally invested, missing out on potential growth opportunities. Experts recommend several strategies for managing old 401(k) accounts. One option is to consolidate them into a new employer-sponsored plan or an individual retirement account (IRA). This simplifies management, reduces fees, and allows for better investment control.
Another option is to leave the funds in the old 401(k) plan, but it's crucial to review the investment options and fees regularly. Workers should also ensure they update their contact information with the plan administrator to receive important updates and statements. Taking proactive steps to manage old 401(k) accounts can help workers protect their retirement savings and ensure a more secure financial future.
Unclaimed 401(k)s Cost Workers Retirement Savings
Many Americans are changing jobs more often, leading to a rise in forgotten 401(k) accounts. A new report highlights that these unclaimed retirement plans can cost workers thousands of dollars in lost savings due to fees and missed growth opportunities. Experts advise consolidating old 401(k)s into a new account or IRA to avoid these potential losses and ensure a secure retirement. Don't let your hard-earned money disappear in forgotten accounts.
Source: Read the original article at NBC