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As millions of Americans quit their jobs in favor of taking time off, finding a new job or even starting their own business, financial experts have a warning: Don’t lose track of valuable employer-sponsored retirement plans.
Neglecting such a plan, which can hold thousands of dollars after just a year of work, is more common than you might think. In the decade from 2004 to 2014, more than 25 million people who switched jobs left one or more employer-sponsored retirement accounts at a former workplace, according to a report from the Government Accountability Office.
Of course, these accounts can be recovered years after the fact. However, tracking them down later can take a lot of time and effort, and means you’ve probably missed out on earnings from neglecting to manage your investments properly.
In addition, if you don’t find any lost employer-sponsored plans by the time you retire, you could face penalties for failing to withdraw money regularly.
“We highly recommend people don’t leave money scattered all over,” said Gail Reid, a certified financial planner and private wealth advisor for Ameriprise Financial Services in Glendale, California.