Did you know more than 20% of 401(k) accounts are forgotten when employees leave their jobs? It’s $1.35 trillion and your money may not be growing the way you think. FOX 26 Consumer Reporter Heather Sullivan shares some Smart Sense on how to find lost 401(k)’s.

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More than 20% of 401(k) accounts are forgotten when changing jobs

When it comes to changing jobs, there are often many things on our minds – updating resumes, seeking new opportunities, or adjusting to a different work environment. In the midst of all these changes, it’s quite common for people to forget about their retirement savings, specifically their 401(k) accounts.

You might be surprised, but studies have shown that more than 20% of 401(k) accounts are forgotten or left behind when individuals switch jobs. This means that a significant number of Americans are losing out on potentially substantial retirement funds simply because they’ve misplaced or neglected their accounts.

So, why does this happen? There are several reasons why individuals forget about their 401(k) accounts during job transitions. First and foremost, people often fail to properly organize and update their financial information when they change jobs. It’s easy to overlook retirement accounts in the midst of paperwork related to the new position, such as signing a new contract or arranging health insurance.

Another reason is the lack of awareness and understanding about the importance of these accounts. Many individuals do not fully comprehend the long-term benefits and security that a 401(k) account can offer. As a result, they may not prioritize the need to keep track of and manage their retirement savings effectively.

Moreover, the complexity of the process involved in handling 401(k) accounts can also contribute to their abandonment. For some, it may seem like a daunting task to transfer or roll over the funds into a new account, especially if they are inexperienced or lack the necessary guidance.

The consequences of forgetting about these accounts are significant. Not only do individuals miss out on the potential growth of their investments, but they also lose the opportunity to contribute to their retirement savings regularly. Over time, these neglected accounts can accumulate substantial sums, which could make a significant difference in one’s retirement years.

To address this issue, steps need to be taken to ensure individuals are educated and aware of the importance of maintaining their 401(k) accounts when changing jobs. Employers and financial institutions should provide better guidance and resources to assist employees in managing their retirement savings effectively.

Moreover, individuals themselves must take more responsibility for their financial well-being and actively seek information on how to handle their retirement accounts during job transitions. This may involve consulting with financial advisors or utilizing online resources aimed at helping individuals navigate the process.

In conclusion, the prevalence of forgotten or abandoned 401(k) accounts during job changes is a concerning issue. With appropriate awareness and guidance, individuals can avoid missing out on the potential growth and security that these accounts provide. Taking the time to stay informed and properly manage retirement savings is essential for a comfortable and financially secure future.