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Elizabeth Warren Wants to Rescue Your Stranded 401(k) Plan

  • Does America need a ’Retirement Savings Lost and Found?’
  • New legislation aims to help workers find old retirement funds
Senator Elizabeth Warren questions witnesses during a Senate Special Committee on Aging hearing on Valeant Pharmaceuticals in Washington on April 27, 2016.

Senator Elizabeth Warren questions witnesses during a Senate Special Committee on Aging hearing on Valeant Pharmaceuticals in Washington on April 27, 2016.

Photographer: Andrew Harrer/Bloomberg

The typical American worker stays at a job for only four years. As many find out, switching employers can wreak havoc on your retirement plan.

The U.S. Government Accountability Office estimates two in five employees cash out small 401(k) balances when they leave their jobs. In the process, they pay taxes and penalties while never giving their money a chance to grow. Or, workers can end up accumulating a collection of 401(k) plans throughout their careers, with small balances spread out at various old employers. It’s a huge hassle to roll those old 401(k)s into a current 401(k) or into an individual retirement account, and it’s easy to lose track of what you’ve saved, and where.