The action for last month was to review the relationships with your professionals. If they have served you well over the years, and have worked to have a good relationship with you, trust them to act in your best interest and treat them with respect by being kind.
Spring has arrived and with it the ritual of “spring cleaning.” While this expression usually refers to clearing out closets, pantries and other rooms in your home, this month’s column provides suggestions to “spring clean” your finances.
The Center for Retirement Research at Boston College estimates that approximately 21 million retirement accounts are inactive. This means that monies are available for individuals to invest and use to meet retirement goals, but the accounts are dormant.
Is it possible that early in your career you may have enrolled in a retirement plan with your employer, or the employer might have automatically enrolled you in a plan, and you have forgotten about it? If you left your job and did not complete the paperwork to roll the money into an account not with the employer, you may have money available.
It can be daunting and frustrating to try and move balances from your employer’s plan into another plan or a rollover IRA. This might lead you to have forgotten about the monies. According to data from the 2014 U.S. Census Bureau’s Survey of Income and Program Participation, the average value of assets in these inactive accounts is about $60,000.
If you know that you left monies stranded at a prior employer or multiple employers, use the month of April to “clean things up” by rolling these balances into a Roth IRA or a traditional IRA based upon the allocation you selected with the employer. The easiest first step is to call the retirement plan’s recordkeeper. Was the plan with Fidelity, Vanguard, T. Rowe Price, Principal or Empower? If you don’t know the recordkeeper, call your old employer for this information.
If you are not sure whether you left money behind at a previous employer, here are some helpful suggestions to find “lost” retirement plan assets. One action to take is to look at the National Registry of Unclaimed Retirement Benefits website unclaimedretirementbenefits.com/. This database allows you to locate old retirement plans using your social security number. Another resource could be the U.S. Department of Labor which has a special database for abandoned plans.
As you conduct this exercise, take action and review the beneficiaries of all your retirement plan accounts. Clean it up if in the past you named someone but your life circumstances have changed. For example, you may have named a sibling as a beneficiary prior to your marriage, but you prefer now to have the money go to your spouse. You must make this change with the recordkeeper or custodian of your account(s). What is on file with them is how the money will be transferred. Naming someone in your will does not count.
This might be a long shot, but another way to track down what might be “free money” is to search the National Association of Unclaimed Property Administrators website unclaimed.org/ to see if you might have money available for you to claim, such as a rental deposit, cancelled subscription, etc. If your parents are older and not technologically adept, help them with these searches.
If any of these actions turn up money that you were not expecting, consider your good fortune and donate some of it to a favorite charity.
Beth Stegner Peabody, CEO of Stegner Investment Associates, is a graduate of St. Agnes School and Sacred Heart Academy. Previous Cents & Sensibility columns may be viewed at https://therecordnewspaper.org/editorials-commentary/cents-sensibility/