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Billions in 401(k)s Left Behind
26 Nov
Summary
- Over 31.9 million 401(k)s are forgotten.
- Average forgotten 401(k) balance is $66,691.
- Job switching and confusion drive 401(k) abandonment.
A growing number of Americans are leaving behind their 401(k) savings, with over 31.9 million accounts currently forgotten. These dormant accounts collectively hold more than $2 trillion in assets. The average balance in a forgotten 401(k) has risen to $66,691, reflecting strong market performance but also potential financial oversight.
Several factors contribute to this issue, including a significant increase in 401(k) participation and high rates of job switching. With median job tenure decreasing, individuals often accumulate multiple retirement accounts, increasing the likelihood of some being misplaced or neglected due to the complexity of managing them during transitions.
Failing to monitor or consolidate these accounts can have substantial financial consequences. It's estimated that mismanaged 401(k)s could cost individuals upwards of $500,000 in lost savings over a career. Strategies like rolling over accounts or seeking professional assistance can help individuals reclaim and optimize their retirement assets.
