How you can get money from an old 401K account you have?
Americans are waving goodbye to jobs in record numbers, setting a new standard for resignations last year. But here’s the catch: they’re leaving behind forgotten 401(k) accounts, with an average of $55,400, according to a fresh study.
Around 1 in 5 U.S. workers have either abandoned or completely forgotten their 401(k) retirement accounts, states Capitalize, a financial services company. And that’s nearly 60% more compared to 2020.
When you bid farewell to your job, you’ve got four choices for your 401(k):
1. Leave it with your old employer.
2. Cash it out.
3. Roll it into an individual retirement account (IRA).
4. Combine it with your new company’s 401(k).
For most, leaving it untouched seems easiest. But moving your funds can be a bit of a hassle due to paperwork, says certified financial planner Kevin Brady.
Inactive 401(k) accounts aren’t all rosy. They’re like that lost sock in the laundry – you’re not sure where it went. Plus, admin fees can eat away at savings.