The Forgotten 401(k): Are You Leaving Money on the Table?

Have You Left a 401(k) Behind? Here’s Why That “Forgotten” Account Could Be Costing You Big

Job hopping is the new normal. Over a career, many people will work for a dozen employers or more—and each job may come with its own 401(k).

The problem? Millions of those old workplace plans are getting left behind, ignored, or truly forgotten. Recent research estimates roughly 32 million “forgotten” 401(k) accounts in the U.S., holding more than $2 trillion in assets, with an average balance of about $66,000 per account.

A recent Wall Street Journal piece highlighted a particularly painful angle: many small-balance 401(k)s are automatically moved into low-yield “safe harbor” IRAs when workers leave, where fees can quietly eat more than the account earns in interest—even in years when the stock market is booming. 

Let’s unpack what’s going on, why it matters, and what you can do about it.

What Is a “Forgotten” 401(k)?

A 401(k) becomes “forgotten” or “left behind” when:

• You leave a job and never roll the money into a new employer plan or IRA
• You move and don’t update your address or email with the plan
• Your old employer’s recordkeeper changes, and you lose track of who holds the account
• The balance is small enough that it gets automatically rolled over into a safe-harbor IRA without much communication or attention

Under the SECURE 2.0 law, employers now have the option to force out (without your ongoing involvement) balances up to $7,000 when you leave, up from the previous limit of $5,000. Balances between $1,000 and $7,000 are generally rolled into a safe-harbor IRA, while $1,000 or less can be cashed out. 

On paper this is meant to protect workers from cashing out small accounts and to reduce admin headaches for employers. But in practice, it can create a large and growing pile of small, scattered, poorly invested accounts.

The Real Cost: It’s Not Just “Small Money”

It’s easy to shrug off a $2,000 or $4,000 old 401(k) as “not worth the paperwork.” But compounding can turn that “small” amount into a very big deal.

For example, imagine you left $3,000 in an old plan that gets rolled into a safe-harbor IRA earning roughly 1% per year in a cash-like investment, while a well-diversified portfolio might reasonably target something closer to 7% over decades (not guaranteed, just a planning assumption):

• After 30 years at 1%, that $3,000 grows to around $4,000
• At 7%, it could grow to roughly $22,000

That’s nearly $19,000 of potential growth left on the table—from just one small, forgotten account.

Scale that across multiple jobs and multiple old 401(k)s, and you can see how researchers estimate that forgotten accounts can cost an individual hundreds of thousands of dollars over a career and collectively add up to billions in lost investment gains. 

Why Are Forgotten 401(k)s Such a Big Problem Now?

Several trends are colliding:

• More job changes. Frequent career moves mean more accounts to manage.
• Higher participation. More employers auto-enroll workers into plans, which is good—but it also means more small-balance accounts left behind. SHRM+1
• Higher automatic cash-out limit. The SECURE 2.0 increase to a $7,000 force-out limit means more accounts can be pushed into safe-harbor IRAs. Benefits² Administrators LLC+1
• Passive behavior. People intend to “deal with it later” but rarely do—especially if the balance seems small or the rollover process looks confusing.

All of this contributes to the estimated $2.1 trillion sitting in forgotten accounts—almost a quarter of all 401(k) assets. 

How to Find Old or Forgotten 401(k)s

If you’ve worked for more than a couple of employers, odds are decent that some retirement money is out there with your name on it. Here’s how to track it down:

1. Start with your own records

• Old pay stubs (look for 401(k) deductions)
• Old emails from HR or plan providers
• Prior-year W-2s that show retirement plan contributions

Even one clue—like a recordkeeper’s name—can help you locate an account.

2. Contact your former employers

Ask HR or the benefits department:

• Who is the current 401(k) provider?
• Do they still hold your account, or was it rolled into an IRA?
• What address and email are on file for you?

If the company has merged or closed, they may still have a successor entity or custodian managing old plans.

3. Use retirement plan and unclaimed property databases

A few key tools:

• Retirement Savings Lost and Found Database – Created under SECURE 2.0 and run by the Department of Labor, this federal tool is designed to help you locate old retirement plans linked to your Social Security number. Investopedia+1
• National Registry of Unclaimed Retirement Benefits (NRURB) – A registry where you can search for unclaimed retirement accounts. Fidelity+2The Motley Fool+2
• State unclaimed property sites / NAUPA & MissingMoney.com – If a plan lost track of you, assets may have been turned over to your state.

4. Check for safe-harbor IRAs

If your balance was between $1,000 and $7,000 when you left, your old employer may have:

• Pushed the money into a safe-harbor IRA in your name
• Invested it in a conservative, cash-like option that may earn very little but still charges fees

Your former employer or the plan’s old statements should tell you which custodian received that rollover. 

What to Do Once You Find an Old 401(k)

Finding the money is step one. Step two is making it work for you again.

Common options (each with pros and cons):

• Simplifies your life—fewer accounts to track
• Keeps everything under one investment lineup
• May offer lower institutional fees than a retail IRA

• Often more investment choice and flexibility
• Good if your current employer plan is limited or high-fee

• Sometimes okay if it’s a strong, low-cost plan
• But adds complexity—more logins, statements, and RMD rules later

• Cashing out before age 59½ usually triggers income taxes plus a 10% penalty
• You also lose the future compounding of those dollars

A financial professional can help you evaluate fees, investment options, and your broader retirement plan before you move anything.

How to Avoid Creating New “Forgotten” Accounts

Going forward, you can make a habit of never leaving a 401(k) behind:

When you accept a new job, immediately note:

• What will happen to your old plan if you do nothing
• Whether your new plan accepts rollovers

Before your last day, ask HR for:

• Plan documents and contact info for the recordkeeper
• Instructions for doing a direct rollover (custodian-to-custodian transfer) to your new 401(k) or IRA

Keep a simple spreadsheet or note on your phone with:

• Employer name, dates worked
• Plan provider
• What you did with the account when you left

The goal is to consolidate over time, not accumulate a trail of small, scattered accounts.

Bottom Line

Forgotten 401(k)s aren’t just an administrative nuisance—they’re a quiet drain on Americans’ retirement security. With trillions of dollars sitting in neglected accounts and new rules enabling more small balances to be forced into safe-harbor IRAs, this problem isn’t going away on its own. NRMLA+2Wall Street Journal+2

If you’ve changed jobs a few times, assume you might have retirement money out there working far less hard than it could be. Take an afternoon to track it down, consolidate where it makes sense, and get those dollars back into a thoughtful investment strategy.

Your future self—standing at the doorstep of retirement—will be very glad you didn’t leave that money behind.