$1.6 Trillion & Counting — The Forgotten 401(k)

July 3, 2025

In the last 45 years, the 401(k) has transformed from a small provision in the Revenue Act of 1978, which gave employees a tax-free method to defer compensation from stock options or bonuses, to becoming the primary vehicle for private sector employees to save for their retirements.

According to research from the Investment Company Institute, 401(k) plans account for $8.9+ trillion in assets across more than 715,000 plans. Around 70 million active employees as well as millions of retirees have a form of 401(k) plan. With the rise of defined contribution plans has come the fall of defined benefit pension plans. The onus and responsibility of saving for the future is now squarely on the employee.

As individuals change jobs more frequently—whether it’s for better compensation, career advancement, increased work/life balance, or the desire to seek out a new challenge—sometimes these 401(k) accounts are accidentally left behind and subsequently forgotten.

In 2023, Capitalize released a report filled with several eye-popping numbers:

• As of May 2023, they estimate that there are 29.2 million forgotten 401(k) accounts holding approximately $1.65 trillion in assets.
• The average balance in a forgotten 401(k) is estimated to be roughly $56,616.

Putting aside the fact that individuals are losing track of their hard-earned retirement savings, these accounts are subject to administrative, operational, and advisory fees from the plan provider / custodian. Over time, these fees will erode returns by tens or even hundreds of thousands of dollars.

If you’re unsure whether you’ve kept tabs on all your qualified retirement plans throughout your career, there are tools available to help you.

Under the federal SECURE 2.0 Act, the Labor Department’s Employee Benefits Security Administration (EBSA) was directed to create a lost and found database for retirement savings. Alternatively, you can also reach out directly to your previous employer’s HR department and inquire if your 401(k) is a ghost ship in a sea of retirement savings.

If you discover a retirement account and you’re unsure of your next step, I encourage you to reach out and discuss your options with your financial advisor. Oftentimes consolidating retirement accounts will simplify management and make it easier to plan for your future.

- Chris McKeown

1. https://www.ici.org/401k
2. https://www.hicapitalize.com/wp-content/uploads/2023/06/The-true-cost-of-forgotten-401k-accounts-2023.pdf/a>