401k’s are critical long-term investments too often forgotten by job-switchers. They are vastly more important than the staplers and pens most people remember to box up.
Consider: Some 7.5 million Americans took about $440 billion in distributions from their 401k plans in 2004, according to Brightworks Partners research. Of the 7.5 million, 6.25 million were job changers and 1.25 million retired. Of the 7.5 million, 55% had 401k balances greater than $5,000.
Thanks to a law enacted in 2005, people leaving their jobs with less than $5,000 in their 401k automatically have their plan rolled into an IRA.
Keep your 401k savings working towards your retirement. If you’re no longer investing your time and energy into your old company, why should you entrust them with your retirement savings? Either move your 401k to your new company, or roll it into an IRA. If you do forget your plan, the state may take it as “unclaimed property.” Nobody, including the state, wants that. — CAREY GREENBERG-BERGER