HOW TO CHECK 401K BALANCE: Simple Guide

HOW TO CHECK 401K BALANCE
Photo Credit: SoFi

Retirement planning is an ongoing process; therefore, it’s critical to keep track of both your current and previous 401k plans. But where do you begin if you’ve never accessed your 401k before? Not to worry; with the right information and a little assistance from your current employer, you can check your account in minutes. If you’re looking for how to access and check your 401k account balance from an old job, we’ve got you covered. Keep reading this article for helpful hints on how to check your 401k balance online, and more. Sit tight!

What Is A 401k Plan?

A 401k plan is a tax-advantaged retirement savings plan offered by many American employers. It is named after a section of the Internal Revenue Code of the United States (IRC).

When an employee enrolls in a 401k, he or she agrees to have a portion of each paycheck deposited directly into an investment account.

How Do 401k Plans Work?

The 401k plan was created by the United States Congress to encourage Americans to save for retirement. Among the advantages they provide are tax breaks. There are two primary 401k options, each with distinct tax advantages. They include:

#1. Traditional 401k

Employee contributions to a traditional 401k are deducted from gross income, which means that the money comes from the employee’s paycheck before income taxes are deducted. As a result, the employee’s taxable income is reduced by the total amount of contributions for the year, which can then be reported as a tax deduction for that tax year.

Contributions and investment earnings are tax-free until the employee withdraws them, usually after retirement.

#2. Roth 401k

Contributions to a Roth 401k are deducted from the employee’s after-tax income, which means contributions are deducted from the employee’s pay after income taxes have been deducted. There are no additional taxes due on the employee’s contribution or investment earnings when the money is withdrawn during retirement.

However, not all employers provide the option of a Roth IRA. If the Roth is available, the employee can choose one or the other or a combination of the two, subject to annual limits on tax-deductible contributions.

How Does A 401k Earn Money?

Your contributions to your 401k account are invested by the options provided by your employer. These options typically include a mix of stock and bond mutual funds as well as target-date funds. They are designed to reduce the risk of investment losses as you approach retirement.

The amount you contribute each year, whether your company matches it, how it’s invested, the annual rate of return on those investments, and the number of years until retirement all affect how quickly and how much your money grows.

You won’t have to pay taxes on investment gains, interest, or dividends until after retirement (unless you have a Roth 401k, in which case you won’t have to pay taxes on eligible withdrawals when you retire).

Also, because of the power of compounding, if you open a 401k when you are young, it has the potential to earn more money for you. The advantage of compounding is that savings returns can be reinvested back into the account and begin generating returns of their own.

Over time, the returns in your 401(k) account may exceed your initial investments. If you continue to contribute to your 401k, it can grow into a large sum over time.

How To Check 401k Balance Online

Below are steps on how to check your 401k balance online:

Step 1: Contact Your Company’s Human Resources Department

To learn how to check your 401(k) balance online, contact your company’s human resources department. Determine who manages your 401(k) plan and request the URL to the online portal. While you’re at it, make sure your on-file address is up to date with your HR representative. This ensures that you receive your quarterly 401k statements.

If your company lacks an HR department, speak with your boss or supervisor instead.

Step 2: Log In To The Online Portal For Your 401k Plan

401k providers mail quarterly statements, but the online portal is the quickest and most convenient way to track your account. Depending on the supplier, you may need a code from your employer to set up and log in.

Step 3: Examine Your 401k Plan Online At Least Once A Year

Because your 401(k) is a long-term investment, you should monitor it often to ensure it’s functioning properly and increasing as anticipated. If you can’t find your 401(k) balance on the provider’s website, visit the “help” page for navigation tips.

How To Check 401k Balance From An Old Job

Rolling over your 401k plan isn’t always your priority when you’re leaving an old job and settling into a new one. Some people even lose track of a 401k plan from a previous job because they don’t know how to check the 401k balance from the previous job.

If you’re looking for How to check your 401k balance from an old job, follow these steps:

Step 1: Make Contact With Your Ex-Employer

Contact the human resources department or the 401k administrator at the company where you used to work. This is the simplest and most direct way to inquire about an old 401k plan. Also, prepare to provide your employment dates and Social Security number so that the plan records can be verified.

Step 2: Examine Your 401k Plan Documents

Make an effort to locate a quarterly 401k statement or plan description. “Collect documents about your 401k plan and former employment,” advises Anna-Marie Tabor, director and managing attorney at the University of Massachusetts Pension Boston’s Action Center.

Box 12 of your W-2 tax forms will tell you whether you made a 401k contribution in a given year. Again, when you apply for Social Security benefits, you may receive an SSA Potential Private Pension Benefit Information Notice, which includes Internal Revenue Service information about any employer retirement benefits you earned while working.

Step 3: Determine The Current Location Of Your Retirement Funds

Another step in how to check a 401k balance from an old job is to find your retirement savings. Your former employer may no longer exist as a result of a buyout, merger, or bankruptcy. Check news reports or ask other former employees if your former employer has been bought or merged by another company.

Most 401k plans are required to file paperwork with the federal government, and you can search these ERISA Form 5500 filings using the name of your former employer at freeerisa.com to try to find current contact information.

The Employee Benefits Security Administration of the U.S. Department of Labor provides an abandoned plan database that will help you determine if a retirement plan has been terminated and provide contact information for the qualified termination administrator.

To see if your former employer has listed you as a missing or unresponsive 401k participant, go to unclaimedretirementbenefits.com. The database contains data on unclaimed retirement account balances.

The Missing Participants Program of the Pension Benefit Guaranty Corporation has been expanded to include 401k plans that end on or after January 1, 2018. When participants are found, the PBGC will pay benefits with interest.

The National Association of Unclaimed Property Administrators’ Unclaimed.org lets you search for unclaimed assets by state. Missingmoney.com also allows you to search across multiple states.

Step 5: Look For IRAS That Require A Forced Transfer

This is the final step in how to check the 401k balance from an old job. If you left a small balance of less than $5,000 in an old 401k plan and didn’t specify what you wanted to do with the money when you left the job, your savings may no longer be in the 401k. The plan sponsor may have transferred the 401k balance to a financial institution in your name.

A 2019 Plan Sponsor Council of America survey found that more than half of 401k plans move between $1,000 and $5,000 to an IRA when a participant leaves their job and takes out less than $1,000.

Conclusion

It’s critical to keep track of your current and previous 401(k) plans as part of your retirement process. This helps you not to forget how to check your 401k balance from an old account or online and also, to gain access to your 401k account at any time.

If you’re finding it hard to access your 401k account, check your balance, or begin a 401k plan, then this article would have done a great deal in helping you out with that.

How to Check 401K Balance FAQs

How can I find out what my 401k balance is?

It should be accessible via your brokerage account’s website. On occasion, some brokerage accounts will also mail out statements. If you don’t know where to look, just ask whoever manages the 401k at your workplace.

How to check 401k balance if I leave my job?

Even if you no longer work at that job, the money is still there. You can contact your previous employer to have the funds transferred to another account once you leave.

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