My Friend Found $40,000 Sitting in an Old 401(k) -- You Might Have One Too

A buddy of mine recently found $40,000 in an old 401(k) account. This was from his first job out of college. Technically, he always knew the account was there. He just hadn't touched it in 15 years.

When he logged in recently to check in, the balance surprised him. His investments had averaged about 7% annual growth since 2010 -- not bad at all. But when we compared that to the S&P 500's average annual return of roughly 12.75% since 2010, the math got painful.

If his money had simply tracked the S&P 500 in a low-cost index fund, that $40,000 could've easily been closer to $90,000.

Ouch.

He's not alone, either. A lot of people have old 401(k)s sitting out there from past jobs. And sadly, they're probably growing slower than they could be.

Why forgotten 401(k)s are so common

It's not that people are careless. Life's just busy.

You switch jobs, fill out new HR paperwork, enroll in your health insurance, and promise yourself you'll "get around" to the old 401(k) later. Then later turns into never.

According to a 2025 Capitalize study, Americans have 31.9 million forgotten 401(k) accounts worth a combined $2.1 trillion. That's "trillion" with a T.

These accounts are often growing slowly in high-fee, low-return investments chosen years ago. Even a small gap in returns (like my friend earning 7% instead of 12%) can snowball into tens or hundreds of thousands of dollars in lost growth over time.

My friend's situation isn't rare. It's happening to millions of workers who've switched jobs multiple times over their careers.

How he fixed it (and simplified everything)

Once my buddy realized how much potential growth he'd missed, he decided to roll over his old 401(k) into an IRA. He also consolidated another 401(k) from a job he left earlier this year.

Now, everything's in one place. Not only does that make life simpler, but he also gained more control and lower fees.

And honestly, the process is way easier than most people think. I've rolled over several of my own 401(k)s over the years -- all into a Fidelity IRA. It's always gone pretty smoothly.

Most brokers will actually walk you through the entire process, help with the paperwork, and some will even contact your old plan provider for you.

My friend had the same experience. His new brokerage handled nearly everything. He just filled out a distribution form to confirm the rollover, and watched the money show up in his new account about two weeks later.

Check out our picks for the top IRAs in 2025 for your rollover.

How to check if you have an old 401(k)

If you've ever changed jobs, there's a chance you've got an old account still out there.

Here are a few tactics to help find it:

1. Search your email for "401(k)" or your former employer's name. You might find account statements or emails related to your workplace plan.
2. Check the Department of Labor's Retirement Savings Lost and Found Database. This is a relatively new tool, created by the SECURE 2.0 Act to help individuals find and reclaim forgotten 401(k)s and other retirement funds.
3. Call your old company's HR department and ask who managed the plan (Fidelity, Vanguard, Empower, etc.).

Once you locate your old account, you can usually choose between rolling it into your current 401(k) or moving it to an IRA for more flexibility.

Keep it simple going forward

My friend's not beating himself up about lost growth. If anything, he's relieved because now his money's organized, his investments make sense, and his financial life feels lighter.

If you've got old 401(k)s floating around, it's worth doing the same cleanup. Even if it's only a small balance, like one or two thousand, it's still worth rolling over. That money can still grow into something much bigger over time.

Consolidate them into one place, take advantage of low-cost index funds, and let compounding handle the rest.

Ready to get started? Check out our picks for the best brokers for beginners in 2025 and roll those old accounts into one easy-to-manage plan.