What a Missing Pair of Sunglasses Has To Do With Personal Finance

Missing Sunglasses

by Alex Casella

I can’t begin to tell you the number of times I’ve misplaced something. Then while cleaning out and organizing the house a little I’ve stumbled upon that one item I was trying to find for months!

It happened recently with a pair of sunglasses. I was going crazy trying to find them. I was bringing up winter coats from the basement and what did I find in the pocket of one of my jackets? You guessed it, the sunglasses I was trying to find for the past eight months of my life.

Believe it or not, this exact scenario happens with our money more than you think.

Many professionals start out a career at an organization who provide a decent retirement plan and an individual will work there for a few years while also contributing to that retirement account. Then decide it’s time to move on to another organization who provides an opportunity more in line with career ambitions, or perhaps to earn more money.

When I hear someone tell me they’ve worked for a few different companies over the years the question I ask is what they did with the retirement account from that old job. The responses given by most people usually indicate that they didn’t do anything with it, or they didn’t know they need to do something with it, and the retirement account is left at the old employer.

So, move on to the new job, the years go by and suddenly you forget that retirement account even existed. At some point, whether you figure it out on your own or through someone else, you realize that you should do something with that old retirement account. And now, similar to my missing sunglasses, you’ll head out on a goose chase trying to track down that money.

Perhaps you’re saying to yourself, “Well so what, just wait until retirement.” Well the truth of the matter is when you leave a retirement account at an old employer, essentially what you’re doing is giving up control of that retirement account. You can no longer contribute to that account, you can’t make distributions (or loans against it), and usually can’t make any changes to the funds you’ve chosen within the retirement account.

When you do move to a new employer you have the option to roll the funds from an old retirement account into an individually owned retirement account known as an IRA, or into the retirement account at your new employer. In both cases you’ll regain control.

Remaining financially organized is very important. Cleaning out the financial junk drawer from time to time can avoid misplacing important financial items such as retirement, or other type of financial belongings from past years, and verify you’re not leaving any money behind.

At the very least, make time to take inventory to organize your finances, review your account balances and performance, and other financial belongings at a minimum of once per year. The same way we do a deep clean around the house to declutter and stubble upon personal items like my missing sunglasses!