Americans Have Lost More Than $1 Trillion in ‘Forgotten’ 401(k) Plans
March 3, 2022
It is becoming increasingly common for Americans, especially young ones, to switch employers or careers several times during their working lives. One downside that comes with such moves is that millions of workers are leaving their 401(k) plans behind.
According to a recent study from Capitalize, a company that helps workers roll over their employer-sponsored retirement accounts, more than 24 million workers have a “forgotten” 401(k) plan, totaling about $1.35 trillion in assets. Their research, based on data from the Department of Labor, Census Bureau, and 401(k) record-keepers, roughly 2.8 million accounts are left behind every year.
According to the study, the average balance in a forgotten 401(k) is $55,400. The study goes on to estimate that forgetting a 401(k) plan could cost an individual up to $700,000 over their lifetime due to the higher fees and lower returns that come from unmonitored plans.