What's Happening?
Financial advisor Roger Ma highlights the importance of checking workplace retirement accounts when leaving a job to avoid leaving money behind. Many employees may not realize that employer contributions,
such as 401(k) matches, may be deposited after their departure. Ma advises individuals to be aware of vesting schedules and to roll over any remaining funds into an IRA to prevent them from being forgotten. Additionally, employees should utilize any remaining funds in flexible spending accounts before leaving, as these accounts can cover out-of-pocket medical expenses.
Why It's Important?
Failing to manage retirement accounts and other financial benefits when leaving a job can result in significant financial losses. With millions of forgotten 401(k) accounts holding trillions of dollars, individuals risk losing access to funds that could support their retirement. Understanding vesting schedules and actively managing retirement accounts can help individuals maximize their financial resources. Moreover, utilizing flexible spending accounts before leaving a job ensures that employees do not forfeit money that could be used for necessary medical expenses.
