54% of US adults unaware of savings options after leaving a job

Fifty-four percent of US adults said they were unaware they had several options for managing their retirement savings after leaving an employer, such as rolling the balance into a new employer's 401(k), according to Empower's "The Retirement Drift" study, published this month. The findings come from a survey of 2,005 US adults conducted in July and August.

Job changes drive the problem. Eighty-four percent of respondents said they had changed employers at least once during their careers, 53% three or more times and 27% at least five moves. Thirty-nine percent said their retirement savings sit in accounts from different employers, and 54% said having the money spread out made it harder to plan for retirement.

Sixty-six percent said they wished someone had explained their retirement savings options when they changed jobs. That interval — between a client giving notice and an old account being closed or moved — is where a job-change review does its work: listing former-employer accounts and putting the rollover decision in front of the client in a single meeting, before paperwork or a plan's default process settles it. Seventy-six percent said clear, step-by-step guidance would make them more likely to keep their retirement savings organized.

Half of Generation Z respondents and 45% of Millennials said they may have retirement savings from a previous employer that they lost track of, against 30% of Generation X and 14% of Baby Boomers. Fifty-seven percent of Gen Z and 45% of Millennials said they were not confident they could locate all their retirement savings today. As Private Wealth Daily previously reported, the study puts the share who may have lost track of an old 401(k) at about one in three.

Seventy percent said they would be more likely to combine old accounts if the process took less time, and a separate 70% said a better understanding of their retirement income options would help them stay organized.

Forty-seven percent said they had delayed dealing with retirement savings — including initiating a rollover — because doing so felt overwhelming.

Left-behind balances add volume at the plan level. A PensionBee white paper also released this month estimates employers move nearly 2 million left-behind accounts with balances under $7,000 out of 401(k) plans and into automatic rollover IRAs each year, PLANADVISER reported.