Study: Quarter of Americans Can't Name Retirement Provider
A new study by PensionBee has revealed that 25% of U.S. adults cannot confidently name the institution that manages their retirement funds. The finding points to a surge in dormant or forgotten accounts and a significant disconnect between individuals and their long-term savings.
- The issue of forgotten accounts is substantial, with an estimated 31.9 million "left-behind" 401(k) accounts in the U.S. holding approximately $2.1 trillion in assets as of July 2025. This represents nearly a quarter of all money held in 401(k)s. - Frequent job changes are a primary driver of this trend; individuals born between 1957 and 1964 held an average of 12.4 jobs by the age of 54. The complexity of the rollover process and confusion when changing jobs often leads to savers leaving their accounts with former employers. - For smaller balances, employers can automatically transfer funds out of their 401(k) plan. Under the SECURE 2.0 Act, accounts with balances up to $7,000 can be moved into a "safe harbor" IRA, often without the account holder's direct involvement. - These safe harbor IRAs can be problematic for savers, as they are frequently invested in low-yield assets and may have high fees that can erode the account balance over time. One analysis showed a $4,500 account in a safe harbor IRA could grow to just $5,507 over 45 years, compared to $25,856 in a traditional 401(k). - If an account is inactive for a period of three to five years, it can be considered "unclaimed property" and the assets can be transferred to the state, a process known as escheatment. This can trigger significant tax consequences, including income taxes and potential early withdrawal penalties. - To help individuals locate these lost accounts, the U.S. Department of Labor launched the Retirement Savings Lost and Found Database in late 2024. This online tool allows people to search for contact information of their former plan administrators.
