Changing Jobs? Don't Forget 401(k) Accounts Along the Way

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Millions of Americans switch jobs every year, and that can be a good thing for those who move up the ranks to positions of better pay and more responsibility. But there's a potential downside to mobility: the forgotten 401(k).

The more frequently workers hop around, the greater the chance they will leave behind 401(k) accounts that might be neglected or even lost over time. From 2005 through 2014, more than 25 million employees have kept at least one retirement account with a previous employer, and millions of workers have left two or more, according to Social Security Administration.

It's easy to lose track of 401(k) accounts if you don't take them with you. As the years go by, companies might be restructured, sold, or go out of business. As a result, their 401(k) plans might get folded or merged. At the same time, employees might change their contact information and fail to update a past employer.

"I've seen it happen," said Mike Piper, a CPA and the author of the blog Oblivious Investor. "People change jobs, they never roll over [their retirement accounts], and they don't know where their money is."

Leaving money behind can make sense, but out of sight shouldn't be out of mind

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It might make sense for you to keep your 401(k) with a past employer if you're happy with your investment options and are comfortable with the fees associated with your plan.

If you choose to leave your retirement account behind, it's important to monitor your investments and be sure they match your goals and risk tolerance, as these are considerations that might change over time.

And make sure your plan has your current contact information and that you stay on top of your past employer's status, writes Jeanne Medeiros, director of the Pension Action Center at the University of Massachusetts Boston. You'll want to know if they have merged with a new company, or are facing financial difficulties.

If you aren't up to the task of keeping up with the former account, it's important to note that you do have other options, including rolling over your 401(k) to your 401(k) account with your new employer or to an individual retirement account (IRA).

Sometimes employers will call the shots for you

Keep in mind, if you don't stay active in monitoring your retirement accounts, then a past employer might make decisions on your behalf.

If you have less than $5,000 in a previous employer's retirement savings plan, and you don't indicate what you want done with the money, then a plan can roll over your money into an IRA -- a move that may or may not make sense for you. And if you have less than $1,000 in your account, then a plan can simply write you a check. This could trigger taxes and penalties.

The bottom line: "It's your money," Piper said. "It's up to you to make sure you know where it is and that it's invested appropriately."

Have you lost track of a 401(k)? Here are some tips for tracking it down

If you lose track of your 401(k), you might need to do some hunting to find it.

A good place to start is with your former employer. Contact the human resources or accounting department and be ready to provide your Social Security number and your period of employment.

Most employers are required to file an annual report on their 401(k) plans -- ERISA Form 5500 -- with the Department of Labor. Using the name of your past employer, you can do a free search for those filings on efsast.dol.gov, a search engine run by the Department of Labor.

A plan's Form 5500 will provide the identity of the plan's service providers, said Richard McHugh, vice president of Washington affairs for the Plan Sponsor Council of America, which represents employers who sponsor 401(k) plans.

In some cases a 401(k) plan might be abandoned or "orphaned." This might happen because the plan sponsor has filed for bankruptcy, or a company's owner has died or been jailed.

The Department of Labor runs an Abandoned Plan database. This site helps plan participants learn if a plan is in the process of being shuttered or has already been terminated. You can search the site for the name and contact information for a "Qualified Termination Administrator" -- a custodian, such as a bank or insurance company, that might have been assigned to terminate the plan. You can then contact this party and seek help in finding your lost retirement account.

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This article originally appeared at The Alert Investor.

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