How to avoid leaving money behind when you exit a job
If Roger Ma hadn’t checked an old account, he might never have noticed that the money he and his wife were entitled to was missing.
In March, a few months after his wife left her job at Amazon, Ma, a certified financial planner in Washington, D.C., said she randomly logged into her old workplace 401(k) account. They transferred the account to a private retirement account in February, but it still had a pile of money in it.
It turns out his employer’s matching contribution arrived two months after his due date.
They’re not the first family to (almost) leave money behind when they quit their jobs. As of July 2025, there were 31.9 million abandoned or forgotten 401(k) accounts worth approximately $2.1 trillion. according to retirement account transfer company Capitalize..
If you’ve recently left a job – either voluntarily or as a result of redundancy – your workplace retirement account is just one thing to double-check. Ma wrote in a recent LinkedIn post:: “Otherwise you may leave money behind without realizing it.”
Here are three potential hiding places for your money that are worth discussing with HR before you leave.
1. Review your old workplace plan
If you leave your job and don’t make any changes to your workplace retirement account, such as a 401(k) or 403(b), one of three things can happen. If you have more than $7,000 in your account, your money is usually stay on your old employer’s plan (some plans may still operate below the previous $5,000 threshold). If your plan comes with good, low-fee investment options, for example, that might be something you want, experts say.
But Ma says this can also lead to a scenario where some of your money is out of sight, out of mind.
If you have less than $7,000 in your account, your company has the option of rolling the funds into an IRA in your name, which could similarly get lost in the wash, Ma says. And if your deposit is less than $1,000, your firm may issue you a check for that amount; If this amount is not reinvested into a similar retirement account within 60 days, is considered taxable income and may be subject to early withdrawal penalties.
Ma says the best move in general is to be proactive by rolling any workplace funds into an IRA at your preferred brokerage firm so you don’t forget about them.
“The sooner you do it after you leave work, the better, because there will be some complacency or life will just happen and you won’t do it,” he says.
2. Double-check your employer’s match
You may not be the only one putting money into your workplace plan. Many employers offer to match an employee’s contribution to a certain percentage of his or her salary. But the money doesn’t start coming in from Day One. Instead, these funds are often This means that if you leave the firm before a certain period of time, you may have to lose some or all of the money the employer invested.
“What to know about the 401(k) match [if you’re leaving your job] It’s the vesting schedule and whether you’re fully or partially eligible,” says Ma.
Under Internal Revenue CodeCompanies can typically offer one of two models:
1. Three-year gap: Employees receive 100% of the company match after working at the firm for three years. If you leave the company before then, you will receive 0% of what your company contributed.
2. Six-year degree: After six years of service, you will receive 100% of your match. Until then, entitlement is partial. 0% after one year, 20% after two years, 40% after three years, etc. you can get it.
When you leave, Ma recommends discussing your vesting plan with your HR representative and the timing of matching contributions. Some companies may contribute every paycheck, while others may operate more intermittently and contribute to your match after you leave your position, he says.
If you discover that your firm has made or plans to make contributions after your separation, make plans to roll the money into an IRA, says Ma.
3. Use money in your flexible spending account
Depending on your employer and the type of insurance you have, you may have access to one. A flexible spending account that allows you to transfer money to an account that you can typically use to pay out-of-pocket medical, dental, and vision expenses for you and your dependents. Contributions are exempt from federal income taxes.
You usually decide your annual contribution during the previous year’s open enrollment, and even if you deposit money into the account with each paycheck, your entire selection is yours to spend on January 1.
That means if you spend the entire balance before you leave, you simply “win as an employee,” says Sara Taylor, senior manager of employee spending accounts at Willis Towers Watson. “You can use the full annual amount regardless of whether your employment is terminated or you fail to contribute equally to that amount.”
Even if you’re laid off, you may still have time to spend the money in your account, Taylor says. Some employers allow you to cover FSA-eligible expenses until your last day of employment, while others may give you leave until the end of the month.
However, the same rules do not apply to dependent care FSAs, which cover the expenses of children under 13 or elderly dependents. These are phased-funded through payroll contributions, meaning you can’t spend what you don’t put in, Taylor says. Some employers let you spend until your last day, while others may let you go until the end of the calendar year.
In both account types, funds generally follow “use it or lose it” rules. Any money you do not spend in your account by your company’s deadline will be returned to the company.
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