We hear the advice often – take advantage of your employer’s 401(k). After all, it’s free money! But what happens when you leave that job and start a new one? Independent financial advisor Mike Reeves of Strategic Wealth Designers joined us on the newscast to discuss dormant accounts and how to know if you’re holding them in your portfolio. Dormant accounts are not actively funded.
“Dormant accounts are those that don’t have financial activity for a certain amount of time,” Reeves says. “The definition of time it takes to become dormant varies by state. You often see and hear about dormant 401(k)s because people move from job to job. But you can also have a dormant brokerage account, pension, or checking and savings accounts.”
Create a spreadsheet of all of your accounts and the last time they had financial activity. Financial activity is a deposit, withdrawal, money transfer, or check written. Different financial institutions may charge fees on dormant accounts, so it is best to research the definition of dormant by institution and state.
“Dormant accounts aren’t advantageous for you,” Reeves says. “Consider moving these accounts to an actively funded account or one that is buying through the ups and downs of the market. Paying fees and not having options is limiting you. So why not move your dormant accounts?”
While it may take effort to track down and move your dormant accounts, it can create a more beneficial outcome for you in the long run. To see additional stories surrounding business and economic news for the Indianapolis area, visit https://CBS4Indy.com/Strategic-Wealth and if you have a question for Mike send an email to email@example.com.