What’s Sitting In Your Old 401(k)?

By: Jack Strulowitz

Even the most organized homes have that one spot. A junk drawer in the kitchen, a storage closet in the basement, or even your entire garage, that stores those items you don’t have much use for, but you’re not quite ready to throw away either. The spot accumulates stuff over time until you need an entire Sunday to sort through it, and who has time like that?

I find that for many people, 401(k) accounts work in a similar fashion. You left a job years ago, but never did anything about the 401(k) account you left behind. According to Fidelity’s 2026 study, the average American has worked for six employers, and 23 percent of people with retirement accounts still have multiple balances sitting in old workplace plans they no longer contribute to. Industry estimates put the total value of forgotten 401(k) accounts nationwide at roughly 2.1 trillion dollars, spread across nearly 32 million accounts, money that has simply gone unmonitored for years.

I see this constantly with clients in their fifties and sixties, and by the time we sit down together, there are sometimes three or four old accounts, each one invested in whatever the person happened to pick during onboarding two decades ago, or in some cases whatever got assigned to them by default.

Just because these accounts are neglected does not mean they stop growing. Employers typically offer a list of funds to choose from, and those funds are usually appropriate on their own. But appropriate is not the same as monitored. A target date fund is one of the most common defaults, and it shifts automatically from stocks toward bonds as the year in its name approaches. That works well for some people. For those with a higher net worth or income outside the account, a fixed glide path may not fit at all, since the fund has no way of knowing about a pension, other savings, or how much you actually plan to spend.

This matters more the longer an account sits untouched, because the numbers involved are not small. Fidelity reports average 401(k) balances of $270,800 for Boomers and $222,100 for Gen X. A person in their late fifties with a current workplace plan plus two old accounts from prior jobs can easily be sitting on a six or seven figure sum split across plans that have never spoken to each other and were never designed to. One account might be aggressive, another conservative, a third somewhere in between, and the combined result is three separate guesses stacked on top of each other rather than a real portfolio.

Consolidating old accounts is not complicated in the way people fear it is complicated. It usually means locating every account tied to your Social Security number, including ones from jobs held decades ago, and deciding where they should land. That might be a current employer plan that accepts rollovers, or a single IRA at a major custodian, and either one gives you an actual portfolio you can look at and manage instead of a scattered collection you have to remember exists. Fidelity’s research found that only 32 percent of people with old accounts have rolled a balance into a current plan, and only 21 percent have moved one into a personal IRA. Most people, in other words, have done nothing.

Rolling over an account takes paperwork and a decision about where the money should land, and nothing forces that decision. There is no bill in the mail, no call from anyone asking about it. It just sits, the way things sit in that junk drawer or that garage, until someone finally deals with it, often years later than they should have. And the whole time, that money can sit in the wrong investments, racking up a real opportunity cost.

The accounts that get neglected the longest tend to be the ones that have grown the most, simply because they have had the most years to compound. That is exactly the money that deserves the closest look. Whether the right home for that money is a current workplace plan, a consolidated IRA, or something else depends on your full financial picture, and that picture is worth putting together properly rather than being left alone and hoping for the best. n

Jack Strulowitz is a Financial Advisor at Bernath & Rosenberg in Cedarhurst, NY, where he helps high–net worth individuals and families manage their investments and build comprehensive strategies for retirement, tax, and estate planning. For questions or to schedule a consultation, please contact [email protected] or 847-962-3352.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.

A plan participant leaving an employer typically has four options (and may engage in a combination of these options), each choice offering advantages and disadvantages: Leave the money in his/her former employer’s plan, if permitted; Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted; Roll over to an IRA; or Cash out the account value.