3 On Your Side

Millennials are job hopping and leaving their 401K behind

Posted: Updated:
(Source: 3TV/CBS 5) (Source: 3TV/CBS 5)
(3 ON YOUR SIDE) -

If you had a pot of money: $5,000, $20,000 even $40,000, would you forget about it? Some millennials are doing just that!

“It's definitely something I think is pretty widespread,” said Financial Planner, Ryan Frailich, founder of Deliberate Finances, which works with millennial investors.

A. T. Kearney’s “2017 Future of Advice Study” shows in 2017: 59 percent of millennials, between the ages of 25 to 34, with tens of thousands of dollars saved, had at least one 401K at a prior employer. While the same was true for only 41 percent of investors overall.

Why is the millennial generation leaving 401K’s with former companies?

“With a lot of younger people, they are changing jobs more frequently than generations have in the past,” Frailich says

These U.S. Department of Labor stats show millennials are job-hopping more than older workers. Some of Frailich’s clients have left several 401K’s behind. Many tell him when they change employers, life can get stressful and busy. 

“Money for your 60’s isn't really on your mind if you're moving cities, and changing to a new job, and having to find a new place to live,” Frailich says.

But leaving that money with former employers can cost you! Frailich had a client who left $10,000 unattended in an old 401K. The account only made $400 over time.

His calculations found if other, more appropriate, investments were made it could have increased by $12,000, giving her a total of $22,000.

“The risk is that if you don't sit down to make an affirmative choice you might be leaving it in something that's an inappropriate investment,” Frailich says.

Another risk is if the employer goes out of business, you may have a tough time tracking down your old 401K.

He says, “Now you have to figure out how do I get an employer signature from a company that no longer exists because a signature from your employer is often required.”

Experts say you don’t have to immediately move your money as soon as you change jobs…just don’t neglect it or forget about it. Frailich explains, “You might have better options elsewhere, but if you don't sit down and look at it you know you can't know that.”

If you are trying to find an old 401K call the human resources department at your old company.

If the place you worked closed and you’re having trouble locating your money, check out these sites for more information.

National Registry of Unclaimed Retirement Benefits:

https://www.Unclaimedretirementbenefits.com

Pension Benefit Guaranty Corporation:

https://www.Pbgc.Gov/news/press/releases/pr17-12

https://www.Pbgc.Gov/prac/missing-participants-program

https://www.Pbgc.Gov/prac/missing-p-defined-contribution

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Copyright 2018 KPHO/KTVK (KPHO Broadcasting Corporation). All rights reserved.


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Gary HarperGary Harper is the senior consumer and investigative reporter for 3 On Your Side at KTVK-TV.

Click to learn more about Gary.

Gary Harper
3 On Your Side

With more than 20 years of television experience, Gary has established himself as a leader in the industry when it comes to assisting viewers and resolving their consumer-related issues. His passion and enthusiasm have helped him earn an Emmy for Best Consumer Reporter from the National Academy of Television Arts and Sciences. He’s also garnered several Emmy nominations

He has negotiated resolutions with companies of all sizes, including some of the biggest corporations in the nation.

Gary has successfully recouped more than $1 million for viewers around the state, making 3 On Your Side one of the most popular segments on KTVK and the station's Web site.

He's best known for investigating and confronting unscrupulous contractors. In fact, many of his news reports have led to police investigations and jail time for those who were caught. Viewers, as well as the companies and people he investigates, regard him as consistently being thorough and fair.

Gary has been with KTVK-TV since 1997. Prior to his arrival in Phoenix, he worked for WZZM-TV in Grand Rapids, Michigan, where he was as an anchor and reporter.

Gary is from Chicago, but launched his television career in Lubbock, Texas, after earning a broadcast journalism degree from Texas Tech University. Following his graduation, he was quickly hired by KLBK-TV in Lubbock, where he enterprised and broke numerous exclusive reports. His aggressive reporting in Texas helped garner him Best Reporter by the Associated Press.

Gary has been married since 1994 and is the proud father of two sons. When he's not helping viewers, Gary is busy catching up on his favorite college and professional football teams as well as cheering on his beloved Texas Tech Red Raiders.

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