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Set It and Actually Forget It (Retirement Accounts)
New York TimesThe Center for Retirement Research at Boston College estimates that about 21 million vested retirement accounts in the United States are inactive, meaning that they are eligible to be tapped but sit dormant instead. The same researchers calculated in 2018 that the average value of assets in these inactive accounts was about $60,000, with a median amount of about $15,000, based on data from the U.S. Census Bureau and the Department of Labor. That’s an amount of money most people can’t afford to lose.
“The numbers cannot show if these accounts are truly forgotten, or if people do plan to access the money someday,” said Laura Quinby, a senior research economist with the Center for Retirement Research. “What we do know, though, is that a lot of people lose track of their retirement savings when they switch jobs, so they might not remember that it’s there.”
If you’ve ever tried to roll over a retirement account, you can probably relate. I had several different jobs at the beginning of my career, all of which offered 401(k) benefits. By the time I reached my 30s, I was dimly aware that I had three separate retirement accounts (all containing paltry amounts) floating around with former employers. Figuring out how to retrieve and consolidate them took days of phone calls, paperwork and coordination with different financial firms.
Understandably, many people never get that far. “People have busy lives and other interests. They don’t have the degree of financial literacy that would make them comfortable engaging with their retirement accounts,” said Steven Holman, who helps oversee record-keeping and asset management at Vanguard, a company that provides investment management and retirement account services for more than 30 million clients. “There’s a lot of fear and hassle involved, so it’s easier to avoid it.” The recent market volatility stemming from the collapse of Silicon Valley Bank doesn’t exactly stoke enthusiasm for financial planning, either.
“The numbers cannot show if these accounts are truly forgotten, or if people do plan to access the money someday,” said Laura Quinby, a senior research economist with the Center for Retirement Research. “What we do know, though, is that a lot of people lose track of their retirement savings when they switch jobs, so they might not remember that it’s there.”
If you’ve ever tried to roll over a retirement account, you can probably relate. I had several different jobs at the beginning of my career, all of which offered 401(k) benefits. By the time I reached my 30s, I was dimly aware that I had three separate retirement accounts (all containing paltry amounts) floating around with former employers. Figuring out how to retrieve and consolidate them took days of phone calls, paperwork and coordination with different financial firms.
Understandably, many people never get that far. “People have busy lives and other interests. They don’t have the degree of financial literacy that would make them comfortable engaging with their retirement accounts,” said Steven Holman, who helps oversee record-keeping and asset management at Vanguard, a company that provides investment management and retirement account services for more than 30 million clients. “There’s a lot of fear and hassle involved, so it’s easier to avoid it.” The recent market volatility stemming from the collapse of Silicon Valley Bank doesn’t exactly stoke enthusiasm for financial planning, either.
6 replies
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... and the donation is deducted from Adjusted Gross Income. So you pay no tax on that money, without having to hit some standard deduction threshold.
I don't think that's available from 401k accounts.
(for you, this is long-range planning. You also have to be 70.5 years old to make Qualified Charitable Distributions)
