Retirement ‘Lost and Found’ Helps Retirees Track Down Old 401(k)s and Pensions To Pay for Housing

A 401(k) retirement plan can do wonders for your financial future—but only if you keep track of it.

A recent study by Capitalize and the Center for Retirement Research at Boston College found that $2.1 trillion has been left unclaimed in forgotten 401(k) accounts, with an average balance of $66,691.

If you’re 65 or older and have changed jobs throughout your career, the Retirement Savings Lost and Found Database by the Department of Labor (DOL) can help you discover lost 401(k)s and pensions.

Thanks to this handy resource, you may recover the funds you’re entitled to and put them toward housing costs or other expenses in retirement. 

Just make sure you weigh the pros and cons of doing so before you go ahead.

How to use this service

Here are the basics: To take advantage of the Retirement Savings Lost and Found Database, you must be at least 65. 

Additionally, it’s only useful if you've worked for a private-sector employer (not a government entity or non-participating religious organization) or were part of a union-sponsored retirement plan. 

After you confirm you’re eligible, go online to the Retirement Savings Lost and Found Database. From there, log into your existing Login.gov account. 

If you don’t have an account, you can create one. Be prepared to share your legal name, date of birth, Social Security number, and a photo of your driver’s license.

Once you log into your account and verify your Social Security number, the database will reveal a list of retirement plans associated with it. It will also provide contact details for each plan administrator. 

It’s your responsibility to reach out to each administrator to collect any retirement benefits you may be entitled to.

What to do with any accounts you find

If and when you recover some lost retirement funds, Grant Meyer, certified financial planner and founder at TruMix Advisors in Minneapolis, MN, recommends you roll them into your current 401(k) or an IRA to consolidate everything.

“Leaving multiple small accounts scattered makes it harder to manage asset allocation and increases the risk of losing track of them again,” says Meyer.

Then, think about how you can make the most out of them.

Depending on your situation, it might make sense to put the funds toward housing.

“If you’re later in retirement, with excess assets and a strong desire to be debt-free, you may want to use part of an old account to eliminate a mortgage,” explains Jace Graham, CEO and founder of Rising Phoenix Resources in Dallas.

Graham warns that even if you’re 65 or older, cashing out an old 401(k) to pay for housing or any other expense creates taxable income. Also, once those dollars leave the tax-advantaged wrapper, you lose the ability to compound them, so you’re leaving growth on the table.

“I think the better option is to roll the old 401(k) into an IRA, invest it appropriately, and let the account support your mortgage, rent, or other housing costs indirectly through future distributions, rather than draining it in one shot,” she says.

The moral of the story is that if you want to use your newfound retirement funds toward housing, be smart and strategic about it.

“Remember when you use those dollars to pay off a mortgage or fund a down payment, you’re trading future retirement security for immediate housing relief. Of course, sometimes the trade-off is necessary, but it should be a deliberate choice,” says Graham.

That same trade-off is now being discussed at a policy level. While Trump is considering a plan that would let Americans use their 401(k) money for a down payment, doing so still comes with an opportunity cost.