By the CreditVana Team | October 2, 2025
Think your old 401(k) is safe just sitting there? Think again. Millions of Americans are leaving behind serious money in forgotten retirement accounts — and it could cost them hundreds of thousands of dollars in the long run.
🚨 The Numbers Are Staggering
A new report from Capitalize, a retirement account transfer platform, estimates that as of July 2025, there are 31.9 million “lost” 401(k) accounts in the U.S., holding $2.1 trillion in unclaimed retirement assets. That’s up 30% from just two years ago.
And it’s not just private-sector employees. The report also estimates that nearly 3 million Thrift Savings Plan (TSP) accounts — used by federal workers — will be abandoned by the end of the year, largely due to government layoffs.
💡 That’s billions in retirement savings being left on the table — and potentially eroded by fees, inflation, and poor investment performance.
🧳 Why 401(k)s Are Getting Left Behind
Several factors are fueling the problem:
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Job hopping is more common than ever, and workers often forget or delay rolling over retirement accounts.
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Automatic enrollment laws (like the Secure 2.0 Act) mean more people are participating — but many don’t realize they even have an account.
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Rolling over a 401(k) is a manual process that often involves paperwork, waiting on a check, and coordinating with plan administrators.
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New investment options like private equity are entering some plans, making rollovers more complex and less liquid.
⚠️ The longer you wait, the easier it is to forget — and the more it could cost you over time.
💰 The High Cost of a Forgotten 401(k)
You can leave your 401(k) with a former employer, but that doesn’t mean it’s the smartest move.
According to Capitalize, the average forgotten 401(k) now holds $66,691, up from $56,616 in 2023. And while market gains have helped grow those balances, unmanaged accounts often sit in underperforming funds and carry higher fees.
🧮 Example: What You Could Be Losing Over Time
| Age | Forgotten 401(k) (Money Market Fund) | Well-Managed IRA or 401(k) |
|---|---|---|
| 35 | $66,600 | $66,600 |
| 45 | $79,736 | $149,077 |
| 55 | $93,914 | $310,122 |
| 65 | $110,612 | $645,141 |
Source: Capitalize | Assumes 0.85% annual fees and 2.5% growth vs. 0.4% fees and 8% growth.
The difference? Over $500,000 in lost retirement savings — just because your account wasn’t moved or monitored.
📌 What You Should Do With an Old 401(k)
When you leave a job, it’s crucial to take control of your retirement savings. You’ve got a few smart options:
🔁 1. Rollover to Your New 401(k)
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Great if your new employer offers a solid plan.
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Keeps all your retirement savings in one place.
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You’ll need to coordinate with both your old and new plan administrators.
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If you receive a paper check, deposit it within 60 days to avoid taxes and penalties.
📥 2. Rollover to an IRA
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Offers more control over your investments.
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Ideal if you want to customize asset allocation, reduce fees, or access a wider range of funds.
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You can open a new IRA or roll it into an existing one. (👉 Compare top-rated IRA accounts)
💵 3. Cash Out (If You’re Retired)
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Available if you’re retirement-age.
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Consider the tax implications — this might push you into a higher tax bracket or increase Medicare costs.
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Avoid this option before age 59½ unless you’re prepared to pay taxes and a 10% penalty.
⏳ 4. Leave It Where It Is
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Sometimes fine, but only if the fees are low and the investment options are strong.
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Be sure to check in regularly, because fees or fund choices can change.
🧠 CreditVana Takeaway
Millions of Americans are unknowingly losing out on hundreds of thousands of dollars in potential retirement income — all because of forgotten 401(k)s.
If you’ve switched jobs, check in with your old employer and track down any accounts you may have left behind. Consolidate where it makes sense, and take charge of your financial future.
🔍 Tip: Use free tools like Capitalize or your current IRA provider to help track and transfer old accounts.
🎯 Bottom Line
Don’t let your retirement money get lost in the shuffle.
Whether you have one old 401(k) or five, make a plan to roll them over, invest wisely, and reduce fees. Your future self will thank you.
