Ep 205 - How to Reclaim Lost or Forgotten Retirement Funds

Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group, family of companys. And welcome to another episode of our.

Podcast, which is called Freedom through Passive Income.

That's right. And welcome to another episode. And before we go, then, this one. This is like the ultimate favorite. Like when this one came out for Fun Street Friday.

Yes.

Just like 40 or 50 comments.

Yeah, usually I get, like, one or two. For those of you listening and all watching, you've got bulldogs.

The bulldog with the nose ring.

Nose ring, yeah.

And he's got a big mug of beer and he's wearing a leaderhosen.

Lederhosen.

Yes, of course.

Pretty. Pretty funny. Pretty funny shirt. Sorry you're missing out.

That's what Bulldogs wears. Lederhosen. But, yeah, because it's Fun Shirt Friday. We're friends all month of July because of birthday month.

Yes.

Shirt flippy.

Yeah, that's right. So for Flip's birthday month, he said, I'm wearing a fun shirt every podcast, every day. So that's why you guys are getting treats. For those of you watching, you're getting your treat. For those of you listening, you just get to hear us describe it, imagine it.

But welcome to another episode, and this one is entitled Reclaim Lost or Forgotten Retirement Funds.

Yeah. So I've got four pages of notes here, so we're going to read through them. For those of you who are listening, if you. It is something that it should be in the podcast notes, it might be something you want to go back to. I had a really good recommendation of somebody saying, hey, if you could put do, like, some visuals and things like that, which is really, really great for the people watching on YouTube, but it's still not incredible for the podcast listeners. So I don't want to not do this on a podcast because I think it's important, but you're just going to want to take some time to say, hey, go back to this episode and listen to it again, or get those podcast notes so you get some of this information. But this is a precursor into a series that we're doing with Ben, one of our investor relations team members. He just went through an entire process of transitioning his funds in order to invest into one of our vehicles. And he said, I learned so much through this process. It's something that I can teach others how to do. And I thought, you know what? That's perfect, because Flip and I are going through some of this process right now where we're actually looking at every single one of our accounts and saying, what should we be doing? With it, what can we do better? How can we shift? We are going to be creating a series of videos or audio episodes where we can teach you what we're going through as well. So we're probably going to put them together. For now, we're just including them as part of the podcast so you guys can keep learning as fast as we are until we actually put the whole campaign together.

Awesome.

So reclaiming lost or forgotten retirement funds. So lots of money out there. We're going to go through pretty fast because again, four pages of notes and I've already wasted three minutes of your time. So CNBC reports over 20% of 401k plan funds are lost or forgotten. So we're going to talk about how to reclaim those funds. When you leave a job where you had a 401k, you have four options if you want to go over them.

Number one, you can leave it with the old employer.

Yep.

Number two, you can cash it out. Number three, you can roll it over into an ira. Or number four, you can merge it with a new with your new company's 401k plan.

Yes. So the number one is why so much money is lost or forgotten.

They just left it.

Yep. Huh. Sometimes you can roll it over while still employed. So listen to this episode to learn more about why you would want to do that. So what we're talking about here is if you're in a 401k plan, you can't self direct it. Okay? So those words are really, really important over the series that we're doing here right now. And with Ben is the word self direct. If you can't self direct your funds, you're stuck in whatever allocations are allowing you to do in, whatever vehicles they're allowing you to do in. Usually it's the stock market, mutual funds, things like that. Whereas if you're in a self directed account, then you can actually put it into real estate. And there's going to be opportunities that we're actually working on to allow people to go, hey, I've got $100,000 investment, 20,000 of my self directed IRA or Roth is going in, plus 60,000 of this, this, you know, vehicle and 40,000 that's in my account, or 20, whatever that math ends up being. We're going to be helping teach you guys how to do that so you can take advantage and get higher returns. So than the money that's just sitting in your 401k doing nothing. Now, you can't always move your 401k. So at the end of 2021, there were nearly 25 million forgotten 401k accounts.

That's 25 million accounts.

Accounts. That doesn't even talk about the money.

The money.

You want to talk about the money?

The average forgotten 401k account balance was over $55,000 or $55,400.

Yes.

So multiply that by 25 million. That's a lot of cheddar.

That's a lot of cheddar. And those accounts are incurring admin fees.

Oh, man.

So you're just losing money in there. Plus, if the stock market's going on, you've got $55,000 on average sitting somewhere and it's going. Whereas you could have taken that out and put it into a self directed account. Right. So how do you find out if you're among the 25 million people who have lost or forgotten accounts? That's what we're going over next. And by the way, we do have resources for some of this information. I'm going to throw it in the notes that we don't have to go waste a whole bunch of time.

Well, number one is you contact your previous employer's HR department.

Yes.

Or number two, you can look at your old statements, which should have the account number plus plan administrator's contact info.

Yes. So depending on the amount in your account, a few things may have happened. Number one, if you had less than $1,000, your employer can cash it out and mail you a check. Number two, if you have somewhere between one and $5,000, your employer can roll the money into an Iraq. Your past employer should be able to tell you if they did either, or of the above. Whether they sent you a check, you should already know that. Or if they rolled it into an ira, you should know that. So you just need to contact somebody, your old employer, or like you said, the company that's on the statement.

Lastly, use a searchable database to see if you can find the old 401k plans that you may have forgotten about. Start with the National Registry of Unclaimed Retirement Benefits, a secure site that allows you to search for lost plans using your Social Security number.

Number.

And then the national association of Unclaimed Property Administrators also operates a database you can search by first and last name.

That's right. So if you think your employer rolled your 401k into an IRA, check free ERISA to track it down. That's free. And then ERISA is ERISA to track it down. Hopefully, if you have time, which you may not, but somebody might have Time we're going to try and put this information and slide it across the screen for you guys on the video. But again, for those of you listening to the podcast, it's going to be in the description. And if we didn't have time to slide it across the screen, then just look at the YouTube description. That's what it's going to mean. After those resources, still no luck.

Try the Department of Labor's abandoned plan database. And then once you find it, either leave it where it's at, ask to roll it over, or cash it out. Now if you cash it out, you'll have to pay income taxes plus incur a 10% withdrawal penalty if you're younger than 59 and a half.

That's right. And so one quick tip, you can consider converting it into a Roth self directed IRA where you can build wealth tax free. That's why we're talk about this episode and that's why we're getting ready to do this series. So pay taxes on $55,000 now, invest it to build it to 100,500, whatever. It's all tax free at 59 and a half when you take it out. So what? Let me just, just backtrack. I went fast. If it's in a, if you're deciding to cash it out, we're telling you to put it into a roth. Because in 401k, a traditional IRA, which is an individual retirement account, that is pre tax, right, you're putting in the money before you got taxed. That means when you take the money, it's going to get taxed. What they're saying strategically and what we're saying strategically and what we're going to try and teach people more and more, take it out. Take the tax hit right now when you know exactly what you're paying in your taxes, put it into a Roth now. It's an after tax account. Guess what? All of that money is now going to grow tax free until you take it out at 59 and a half and later and you take it out tax free so it could build and build and build and build. So you know what Flip and I are doing? We're stuffing our Roth account with as much freaking money as we can and we're investing our Roth accounts. We don't even want IRA accounts because we want to pay taxes on it now and not pay taxes on it later and allow it to build 100% tax free. So super excited about getting this message out over and over and over and over again until you guys are going. We get it flipping Danny. But we're going to continue to teach more about this. Ben's going to go more into how you actually make these shifts happen. And again, we know that this is a lot of data in one thing. Get to those podcast notes. There's some things that we want to share. It's hard to share on a podcast without referring you to the notes that we're going to give you. And as we grow our team, I'm sure we're gonna get some marketing guys in here. They're gonna go, hey, I know how to make this easier for you guys and your listeners. And we're gonna go, yes, for now, we just, we're winging it. We're doing the best we can.

That's right. Well, we hope that you enjoyed this episode again. We're gonna be diving deeper into all this over the next few months, of course, but we hope you enjoyed this episode. Make sure you're heading on over to our website, freedomcapitalinvestments.com to join our investor club to learn about all the deals and things that we're doing behind the scenes. But we're on all the social media, so make sure you with us out there as well, let us know how we're doing and all that fun stuff. But we'd like to end all of our episodes with Invest Smart, Live Happy. Bye, everybody. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss.

Sam.