NEW YORK (MainStreet) -- If you were leaving a job tomorrow, you'd take all the tchotchkes off your desk, your sweater off the back of the chair and that last iced tea you left in the break room fridge -- but what about your 401(k)?
Mike Lynch, vice president of strategic markets at The Hartford Fund, hosts seminars where he asks just that question: if you were leaving your job tomorrow, what are the three things you would you take with you? The answers range from desk photos and pictures to the far more trite “memories,” but Lynch says nobody ever offers a response related to their retirement plan. Whether you've been fired, laid off or are just switching jobs, Lynch says you're rarely calling a financial advisor or human resources on the way out the door to see what you can do with your retirement plan.
“We forget because there's nothing you have to do,” he says. “You don't have to check off a box or fill out a form, you just leave a company and the money stays behind and you forget about it.”
You also tend to leave this money behind, because you're used to putting your retirement plan on cruise control and not actively engaging in it. According to a study by Voya Financial of workers participating in an employer-sponsored retirement plan, one-third (33%) only save up to the amount their employer would match. Another one-in-five (20%) save an amount that was determined automatically by their employer, while a slightly smaller group (17%) contributed up to the maximum amount allowed by the plan. That's less than a third of you (29%) using any other method to save for retirement, and that isn't great.
“The way retirement plans are constructed today -- getting away from defined-benefit pension plans and into 401(k) defined contributions -- it really puts a lot of burden on the employee to take charge of their own retirement plans to meet their financial objectives,” says Mario Minotti, head of the Chicago-based Minotti Group, a retirement investment agency.
It isn't just 401(k) plans employees are leaving behind, either.