If you’ve switched jobs, what did you do with your 401(k)? If you don’t remember, or if it’s still with your previous employer, you may be leaving hard-earned cash on the table.
More than half (54.3%) of working-age American families had a retirement account with a median value of $86,900, according to 2022 data from the Federal Reserve.
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“For many families, the assets held in IRAs and DC plans (typically associated with either a current or past job) are among the most important components of their balance sheets and are a key determinant of their future retirement security,” according to the Fed.
Forgotten 401(k)s are a big problem
With the importance of retirement accounts to family finances, it may seem surprising that “forgotten 401(k)s continue to grow significantly and now exceed $2 trillion in assets for the first time,” according to Capitalize, a company that offers digital tools to find, consolidate and maximize retirement savings (1).
Capitalize estimates that, as of July 2025, there were 31.9 million left-behind or forgotten accounts, nearly double the 18.3 million accounts that were unclaimed in 2015.
And these forgotten accounts aren’t just low-balance accounts, either. Driven by the strong performance of equities and other investments, the average balance in a forgotten 401(k) account increased 18% since May 2023 to $66,691.
A Thrift Savings Plan (TSP) is the public sector equivalent of a 401(k) — and they, too, are being left behind or forgotten.
By June 2025, there were more than 7.2 million TSP plan participants with an average balance of $134,633, according to the Federal Retirement Thrift Investment Board (FRTIB). That results in a total program amount of just over $1 trillion.
Capitalize estimates that almost 3 million TSP accounts will be left behind by the end of 2025. But with an acceleration of cuts to the federal civil service, the firm expects this number could increase.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
3 main forces driving forgotten 401(k)s
Capitalize attributes this ‘forgotten’ trend to increased participation in 401(k)s, high rates of job switching and peoples’ confusion about what to do with their 401(k)s when they leave their jobs.
As of March 2023, 67% of private sector workers had access to defined contribution (DC) pension plans such as 401(k)s, up from 62% in 2008, according to the U.S. Bureau of Labor Statistics (BLS). Over the same period, participation rose from 43% to 49%.
The SECURE 2.0 Act has expanded access to 401(k) accounts, helping to lift participation (2). That means there are a lot more 401(k) plans that could potentially be left behind.
But this typically happens as the result of a job change. As of January 2024, U.S. wage and salary workers stayed at a job for a median of 3.9 years, according to BLS data.
The median tenure was 3.5 years for private sector workers and 6.2 years for public sector workers. That means a worker with a 45-year career could change jobs more than 10 times. So, if they have a 401(k) at each employer, this creates several opportunities for at least one to be left behind.
One reason so many 401(k)s are abandoned during a job transition is because these plans don’t automatically move with the employee — and the process of deciding what to do with the plan, including assessing possible tax implications, can be confusing and overwhelming. As a result, some workers procrastinate and eventually lose track of their plans.
Doing nothing can cost you
If you’re participating in a 401(k) and you switch employers, depending on how much money is vested (3), you have four options for your plan: You can keep it where it is, roll it over into an individual retirement account (IRA), roll it into a new 401(k) at your new employer or cash out the assets. Each has pros and cons that need to be weighed.
If you choose to leave it at your former employer, over time you can end up with multiple plans at multiple employers. Some may be forgotten and, for those that aren’t, it can be difficult to properly track the investment allocations, performance and fees of all of them over time.
This may seem unimportant, as it’s common advice to invest for the long run and not actively trade your investments. But they still require monitoring and rebalancing from time to time.
As a result of not monitoring those accounts — which means not attempting to minimize fees and not maintaining an optimized asset allocation — Capitalize estimates that “forgotten and mismanaged 401(k) accounts could end up costing an individual over $500,000 dollars in foregone savings over a career in a worst case scenario.”
If you’re planning to leave your current employer, start planning ahead. Be sure to review all literature your current plan administrator provides, since some employers provide direct rollover options.
While you can cash out your 401(k) instead of rolling it over, you’ll be taxed on the distribution and will likely face a 10% early withdrawal penalty, so it’s worth considering other options.
If you believe you may have forgotten a plan or have a number of plans at other employers, you could enlist the help of a financial advisor or specialized company to help you find 401(k) plans and consolidate them — so you’re not leaving your hard-earned cash on the table.
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Capitalize (1); The Currency (2); Fidelity (3)
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