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.

How to consolidate old 401(k) account?

Consolidating old 401(k)s into a single retirement account, like an IRA or new 401(k), can be wise. It’s simpler to manage, avoids fees, and might offer better investments. Before consolidating, you need to find those forgotten accounts. If you’re wondering, “Did I have a 401(k)?” – ask HR. Or if you have old paperwork, it’ll have account info. Tech helps. Check the National Registry of Unclaimed Retirement Benefits. Use your Social Security number to find lost plans. The National Association of Unclaimed Property Administrators also has a name-based database. If you’re stuck, the Department of Labor’s abandoned plan database might help. Once you know, talk to the administrator to transfer funds. Move to your new job’s plan or your existing IRA. Or cash out, but expect taxes and maybe a penalty if under 59. If your stash is under $1,000, your old boss might cash it out. $1,000 to $5,000 could go to an IRA. Tools like FreeERISA help. The takeaway: don’t forget your 401(k). Whether you’re changing jobs, retiring, or more, ensure your retirement funds are on board. Keep options in mind – stay put, roll to IRA, new job, or cash out. Decide thoughtfully – it’s more than pocket change.