If you’ve ever had a 401k account with an employer and lost track of it after you’ve left — you’re not alone.
We estimate that there are over 25 million ‘orphaned’ 401k accounts just like yours. These are accounts tied to former employers that continue to have money in them, but are not actively being monitored or used.
At Capitalize, we help people find these old, orphaned 401k accounts and consolidate them into a new retirement account — for free. This helps them better keep track of their retirement savings over time.
The money you’ve put away in a 401k account remains yours even after you’ve left that job. Most of the time it’s still at the same financial institution that managed it while you had it. This financial institution is known as a “401k provider”. It’s a company engaged by your former employer to hold and manage your 401k assets. You can see a full list of 401k providers here.
Some of the time, though, your money has been transferred to a new institution. That generally happens in one of three cases:
- Your former employer changes their 401k provider — when this happens your 401k account will be transferred over to the new institution.
- Your former employer is acquired by another company — when this happens your account usually gets transferred to the 401k provider used by the acquiring company.
- Your account balance was under $5,000 and was transferred to an IRA at a different institution — this is known as a “forced rollover” and is allowed by some 401k plans.
Find your 401k and roll it over into an IRA online, for free
We’ll walk you through the entire process and help you choose an IRA provider if you don’t already have one. Chat with an expert at any time if you have questions or concerns!
You have four main options for an old 401k that’s tied to a former employer.
- Cash it out — this is also known as a “withdrawal”. It allows you to get a check with the money you saved in your 401k, but you’ll pay taxes and penalties on it if you’re under the age of 59 and a half. It’s generally discouraged by financial advisors unless you need the money for an emergency.
- Leave it in the old 401k — some 401k plans will allow you to leave your money there even after you’ve left a job. That’s a valid choice if you like the investment options and are comfortable with the fees in that account. Just keep in mind that your employer can change the 401k provider (financial institution) that manages your money without your consent, and you’ll need to keep track of it.
- “Roll over” your old 401k into an IRA — a “rollover” is the technical term for a tax-free transfer of your savings from one retirement account to another. Almost 5 million Americans choose to move their old 401k into an individual retirement account (IRA) each year. An IRA is an account you open on your own, and it’s not tied to your employer. You can open one at an institution of your choice, like Fidelity, Vanguard, or your current bank.
- Roll over your old 401k into a new 401k — although more people choose to move their old 401k into an IRA, you can technically move it into a new 401k you have with a current employer. That’s not possible all of the time though — some employers and 401k providers will allow it, and you’ll need to check. It might also require more paperwork and you’ll then need to move it again when you change jobs. Overall, though, a rollover into a new 401k is also tax-free if done properly and is a good option if you like your new 401k plan.
At Capitalize we help our users move their legacy 401k account into an IRA. Don’t worry if you don’t already have one — our online rollover process guides you through your different IRA options and helps you pick one that’s right for you.
Ready to take control of your assets?
Capitalize helps you consolidate your old 401ks by rolling them into an IRA of your choosing. Use an existing IRA if you have one, or we’ll help you open one if you don’t.