Track down old 401(k) plan statements
The first thing you can do to find money held in forgotten 401(k) accounts is to go through old plan statements you may have. The statements could have come in the mail or you may have received them electronically through email.
There are some possibilities that may have occurred when an automatic transfer of your 401(k) balance has taken place. For example, your former company may have changed plan administrators, and we are no longer the custodians for your previous employer-sponsored plans.
What Happens to My 401(k) If the Stock Market Crashes? If you are invested in stocks, those holdings will likely see their value fall. But if you have several years until you need your retirement account money, keep contributing, as you may be able to buy many stocks on sale.
After you retire, you may transfer or rollover the money in your 401(k) to another qualified retirement plan, such as an individual retirement account (IRA). This may be a good idea if you're looking for more investment options.
The short answer is that yes, you can withdraw money from your 401(k) before age 59 ½. However, early withdrawals often come with hefty penalties and tax consequences.
Generally, you have 4 options for what to do with your savings: keep it with your previous employer, roll it into an IRA, roll it into a new employer's plan, or cash it out.
Stock market crashes can lead to 401(k) losses, but often, these are only short-term setbacks. As long as you've diversified your savings among many companies and sectors and you're not investing too aggressively for your risk tolerance, you will likely see your portfolio rebound in time. Patience is key here.
Any money you contribute to your 401(k), such as money contributed via payroll deduction, is money you can't lose. That employer can't take that money from you, even if you leave the company entirely. But there is another portion of your retirement plan you may not be able to claim: your vested balance.
The value of a 401(k) account, or any retirement account, always depends on how the account is invested. For many people who are still decades away from retirement, their portfolios will largely consist of stock-based funds, which may suffer declines during a recession or economic slowdown.
The average 401(k) balance rose to $107,700 by the third quarter of 2023, up 11% from the year before, according to the latest update from Fidelity Investments, one of the largest retirement plan providers in the nation.
Investing in a 401(k) account offers the potential for long-term growth and financial security. However, it's crucial to understand that this retirement savings vehicle is not immune to losses. Your 401(k) is investing in the stock market, so it's possible to lose money over time.
The fund may lose all (or a substantial part) of its value in the markets just as you're ready to start taking distributions. While that's true of any financial investment, the risk is compounded by the relative inaccessibility of 401(k) money throughout the account's—and your—lifetime.
There are three main ways to find an old 401(k): contacting your old job, tapping into various databases or checking with the state's unclaimed property department.
If you are wondering, “Why is my 401k not growing?” there may be an easy answer. If your investments are considered more risk-averse and on the safe side, then you may be limiting how much and how quickly your 401k can grow over time. Many 401ks invest in the plan's default option, which is a target date fund.
To access your 401(k) money now, you'll have to contact your 401(k) plan's administrator to withdraw funds. Consumers can reach out to human resources from their companies to get more details.
Your former employer's contributions to your 401(k) may be unavailable after you leave a job due to a lack of vesting. Vesting schedules can vary from employer to employer but are typically spread out over several years. Lack of access to your 401(k) contributions and vested assets is usually only temporary.
Since you've lost your job, you won't be making contributions from your paycheck, and your employer won't be matching any contributions. Other than that, your 401(k) will usually remain in your old employer's plan until you transfer the funds in it to a new plan or withdraw the money.
401(k) losses can happen for all kinds of reasons, from short-term market fluctuations to events like a recession. Market volatility is a normal part of investing. What matters most is staying invested and maintaining a diversified portfolio.
Treasuries are safe investments because they are backed by the “full faith and credit” of the US federal government. The US government has never defaulted on a debt obligation. One special category of treasury securities is Treasury Inflation-Protected Securities (TIPS). TIPS interest rates are indexed to inflation.
In 2024, workers can contribute $23,000 to their 401(k) plans, and employees over age 50 can sock away an additional $7,500 in so-called “catch-up contributions.” In 2025, workers can contribute $23,500, but the catch-up contribution of $7,500 will remain the same. And thanks to the Secure 2.0 Act, starting Jan.
Transferring Your 401(k) to Your Bank Account
That's typically an option when you stop working, but be aware that moving money to your checking or savings account may be considered a taxable distribution.
You can either request that it be sent directly between plans or take out the proceeds in cash and deposit them in your IRA within 60 days.
As a general rule, if you withdraw funds before age 59 ½, you'll trigger an IRS tax penalty of 10%. The good news is that there's a way to take your distributions a few years early without incurring this penalty. This is known as the rule of 55.