Key Takeaways
- Over $2 trillion in assets is sitting in forgotten or left-behind 401(k) retirement accounts from employees who leave their jobs and leave their retirement savings behind.
- Leaving a 401(k) behind rather than rolling the funds over can result in significant fees and potentially missing out on future growth.
We’ve all found cash in our jeans pockets or hidden away in a purse after forgetting we put it there. It’s as if our past selves left us a little gift to pay for a cup of coffee.
But can you imagine forgetting about nearly $67,000?
You might not think it’s possible, but that is the average balance in a forgotten or left behind 401(k) account. This means that instead of rolling over savings from an employer-sponsored retirement account after leaving a job, these accounts sit stagnant.
What This Means For You
A forgotten or left-behind 401(k) means having less control over your money and how it grows to support you in the future. Leaving a 401(k) behind rather than rolling the funds over can result in significant fees and potentially missing out on future growth.
The Options
When someone leaves a job and has an employer-sponsored 401(k), they typically have four options: Roll the funds over to their new employer’s 401(k) plan, roll it into an IRA, cash out the balance, or leave it be.
For those who choose to leave it with their old employer (if permitted), the earnings will still grow tax-deferred, but the employee won’t be able to contribute to it. If the former employer offered a company match that also contributed to the account, that will also stop.
Fees can also start accruing after you leave your job, as companies typically stop covering the administrative fees required to maintain the account.
As of July 2025, there are nearly 32 million forgotten or untouched 401(k) accounts, collectively holding over $2 trillion. Those assets are likely not being actively managed or growing as much as they could.
The issue has gotten so bad that the federal government created a Retirement Savings Lost and Found Database to help people find their old pension plans and 401(k)s.
“Leaving money in [an] old employer’s account is not inherently bad,” said Anqi Chen, associate director of savings and household finance at the Center for Retirement Research. CRR worked with the retirement savings platform Capitalize on the report.
But she said it’s important to know the risk of leaving it rather than rolling it into an IRA or a 401(k) with a new employer.
“If the former employer used to pay some of the fees, but stopped paying them for separated employees, this will raise the cost for the employee,” Chen said. “If the employee isn’t paying attention, the higher fees can slowly erode away at the savings.”
The longer a participant is separated from their former employer, the more likely they are to lose track of their fees and asset allocations. The analysis suggests that in a worst-case scenario, mismanaged or forgotten 401(k) accounts could result in an individual forgoing over half a million dollars in savings over the course of their career.
Many financial experts recommend consolidating retirement accounts to avoid extra fees, confusion, and the risk of missing out on important information.
Do People Really Forget Their Money?
Chen said she doesn’t actually believe those with larger balances “forget” their money. Instead, she said they likely have pushed it to the side because they don’t want to deal with it yet.
“Transferring money into a new employer’s 401(k) or IRA used to be a very cumbersome process,” Chen said.
That’s because the system wasn’t modernized, which led to delays and the need for paper checks.
“People might not be aware that there are solutions out there today that make the process much more painless,” she said.
A direct rollover allows employees to move their balance from one retirement account to another without being taxed or penalized. To do this, employees can contact their former employer to obtain the necessary rollover paperwork and instructions, then provide them with the necessary information to send the funds electronically to either a retirement account through a new employer or to an IRA.
