Forgotten 401(k)s: What to do with your old retirement accounts

Leaving a job often comes with a long to-do list. But one thing you shouldn’t ignore: your old retirement accounts.

If you’ve recently left a label, got laid off, or gone solo as an independent consultant, chances are you’ve got money sitting in a former employer’s 401(k), 403(b), or other workplace retirement plan.

That money is still yours. Your contributions and any vested employer match are likely still invested as you left them, unless the plan says otherwise.

Here’s how to track them down and decide what to do next.

Find your old accounts

Start with your old HR or payroll documents. If you used a portal like Fidelity NetBenefits, Principal, or Voya, check your login history or call their support. Your annual W-2s may also name the plan provider.

If you can’t access the account online, contact the company’s HR or benefits department and ask for your latest account statement. Even if you left years ago, you still have a right to your vested funds.

Additionally, you can search for old retirement accounts using the U.S. Department of Labors Retirement Savings Lost and Found Database.

Understand your 4 options

Once you’ve located the account, you have four choices:

1. Leave it in your former employer’s plan

How it works:
Your money stays where it is. You stay invested in the same funds, and the account remains under the plan’s umbrella, just no longer actively contributed to.

Pros:

• May offer access to institutional-class funds with low fees.
• Keeps funds tax-deferred.
• Simple, no paperwork or immediate action required.

Cons:

• Investment options are limited to what the old plan offers.
• Plan rules may change over time without your input.
• Communication gets harder once you’re no longer an employee. Some providers require extra steps to update contact info or access documents.
• If the employer switches custodians, your login or account access could be disrupted and require new paperwork to re-establish.

When it works best:
If the plan has excellent investment options, low fees, and you want to avoid opening a new account right now.

2. Roll it into your new employer’s plan

How it works:
You move your old retirement balance into your current job’s retirement plan. This is a trustee-to-trustee transfer, usually initiated by filling out forms from both providers.

Pros:

• Consolidates your accounts for easier tracking.
• Keeps money growing tax-deferred.
• Avoids pro-rata rule issues if you plan to do a backdoor Roth IRA.
• Maintains workplace-level creditor protections.

Cons:

• You’re limited to investment funds your new employer plan offers.
• Some plans charge higher administrative fees or limit rebalancing tools.
• Not all plans accept roll-ins from previous accounts.

When it works best:
If your new plan has solid investment choices and you want to keep things simple while preserving the ability to do a backdoor Roth strategy.

3. Roll it into a Rollover IRA

How it works:
You open a Rollover IRA at a custodian like Fidelity, Vanguard, or Schwab and transfer the funds directly from your old plan. Traditional and Roth funds must be rolled over to corresponding accounts.

Pros:

• You gain full control over investment options.
• Access to thousands of low-cost mutual funds, ETFs, and individual holdings.
• Transparent fees and no employer limitations.
• Can separate traditional and Roth money into appropriate accounts.

Cons:

• If you later want to do a backdoor Roth, having pre-tax IRA balances could trigger the pro-rata rule and tax complications.
• IRAs may offer less creditor protection than employer plans, depending on your state.

When it works best:
If you want more flexibility, control, and visibility into how your retirement money is invested.

4. Cash it out

How it works:
You request a full distribution and take the money as a withdrawal.

Pros:

• Quick access to cash.
• Can help cover emergencies or transition expenses in short-term hardship situations.

Cons:

• You’ll owe ordinary income tax on the full amount.
• If you’re under age 59½, there’s an added 10% early withdrawal penalty.
• Permanently reduces retirement savings and future compound growth.

When it works best:
Only as a last resort. This option carries steep costs and long-term consequences.

Analyze your investments

Open your old plan and look at:

• Ticker symbols: Are you holding broad index funds or niche investments?
• Expense ratios: Some employer provided funds charge high fees compared to IRAs.
• Performance history: How have the funds performed?

In a Rollover IRA, you can access thousands of low-cost options, including ETFs and mutual funds, and have more flexibility to build a personalized portfolio.

Know the transfer rules

• Traditional and Roth balances must be rolled over separately
  If your old plan includes Roth 401(k) money, it must go into a Roth IRA, not a traditional IRA.
• Direct (trustee-to-trustee) transfers are best
  This method avoids taxes and penalties. You never touch the funds directly.
• Avoid the 60-day rollover window
  If you receive a check and fail to deposit it into another retirement account within 60 days, you could owe taxes and penalties.

Here’s a reference table showing what types of accounts can be rolled into others:

Roll To	Roth IRA	Traditional IRA / SEP IRA	Traditional SIMPLE IRA	Roth SIMPLE IRA	Qualified Plan 401(k), 403(b), 457(b) (pre-tax)	Designated Roth Account 401(k), 403(b), 457(b)
Roth IRA	Yes	No	No	Yes, after 2 years	No	No
Traditional IRA / SEP IRA	Yes	Yes	Yes, after 2 years	Yes, after 2 years	Yes	No
Traditional SIMPLE IRA	Yes, after 2 years	Yes, after 2 years	Yes	Yes	Yes, after 2 years	No
Roth SIMPLE IRA	Yes, after 2 years	No	No	Yes	No	No
Qualified Plan 401(k), 403(b), 457(b) (pre-tax)	Yes	Yes	Yes, after 2 years	Yes, after 2 years	Yes	Yes
Designated Roth Account 401(k), 403(b), 457(b)	Yes	No	No	Yes, after 2 years	No	Yes

(Source: IRS Publication 590-A)

High earners, be aware of the pro-rata rule

If you’re using a backdoor Roth IRA strategy (non-deductible traditional IRA contribution, then conversion), having any pre-tax IRA money (like from an old 401(k) rolled into a traditional IRA) will trigger the pro-rata rule. This can lead to unintended taxes.

To avoid this:

• Roll old 401(k) money into a new employer plan if they accept roll-ins
• Avoid adding pre-tax dollars to your traditional IRA unless part of a larger plan

Final thoughts

If you’re a music executive transitioning between roles or launching your own venture, don’t forget to bring your retirement savings with you. Old accounts might be easy to overlook, but they can have a major impact on your long-term financial picture.

Review them. Consolidate where it makes sense. And make strategic decisions based on your tax bracket, investment goals, and future plans.

Want help reviewing your options? Schedule a call and let’s go over it together.