Stop Abandoning Your 401(k): America’s Expensive Job-Switching Mistake

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A shocking number of workers are leaving their 401(k) savings behind when they switch jobs—losing years of investment gains as old employers sweep forgotten accounts into cash-parked IRAs. From missed rollovers to failing to reinvest, to cashing out and paying steep penalties, the mistakes add up fast. This commentary exposes how poor financial literacy and inattention can cost tens of thousands, and why Americans need to start treating their retirement like the serious responsibility it is.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski ouch peble.

Speaker 2 (00:17):
What's the matter with you don't leave your four to
one K money behind? These numbers are staggling. Americans are
leaving behind more their four to one K savings as
they switch jobs, sometimes without realizing it. What how do
you not realize that you've been saving money and putting

(00:41):
money into a four oh one k and you didn't
realize it, and you're just gonna leave it there. Millions
of US workers are losing out on billions of dollars
in investment gains as they're old. Employers sweep their four
oh one K money into individual retirement accounts that are
parked in cash. Then a lot of companies can do

(01:04):
that if you have a small balance. These are called
involuntary rollovers, and they're becoming more common now. Employers, and
this is a good thing, automatically enroll new hires in
four one K plans. And again, workers don't realize this.

(01:24):
You don't look at your paycheck. You don't see that
money is coming out into this This is extraordinary to me.
Involuntary rollovers are just one way that switching jobs can
hurt retirement savings. Many new hires forget to sign up
for four one K plans or roll there for one

(01:45):
k into an IRA, and forget to reinvest the cash.
In worst case scenario, some cash out there accounts no,
then you pay a penalty, and then you pay taxes
the jobs this switch is a time when a number
of bad things can happen to retirement savings. It doesn't

(02:05):
have to be that way, people, It's not that hard.
It really isn't. And it's your money, you earned it.
I mean I used to yell and scream here on
the program, people not participating in four to one k
plans and then throwing away the match that their employer

(02:27):
oftentimes would give them. Now people are failing to even
bring it with them anyway, and they give an anecdotal
story here. This is a twenty nine year old environmental
analyst from Rochester, New York, missed out on stock market
gains become of an involuntary rollover after leaving a job

(02:48):
in twenty twenty one, four years ago, she received a
notification from her former employer that a four to one
k was being rolled over to an IRA. Busy with
her new job, she put off making a decision about
her IRA until late last year. Until late last year,

(03:12):
you were busy with your job. You're an environmental analyst.
What do you work for? Al Gore? I'm sorry, I
don't mean to be flippant here, but yeah, I kind
of do. You know, sometimes people, you need to get
smacked up side the head. You gotta get done. You
canna act like a grown up for crying out loud.
This is your money. Then people worried I don't have

(03:33):
enough savings. Haven't done this. I haven't done that. This
is important, you know. This is one of the things
that it's problematic with education. Another problem with education here
in this country, we do not teach young people about money,
how it works. We don't teach them about compounding the
magic of compounding when it works for you, and also
the pain when it works against you. But come on, people,

(04:00):
this is your money. You're just gonna let it sit there.
Watch Dog on Wall Street dot Com