Small 401(k) balances moved out without asking: where they go
Plans can pay out or move small balances of people who left. The limit is $7,000 for distributions after 2023. How to trace the money.
When you leave a job with a small vested balance, the plan may not keep it. If the plan's rules allow, it can:
- Pay out balances of $1,000 or less by check.
- Roll over balances up to $7,000 into an IRA opened in your name, without your consent. The limit was $5,000 before 2024; the SECURE 2.0 Act raised it to $7,000 for distributions after December 31, 2023.
These IRAs are often held by firms that specialize in them. Fees can shrink small accounts over time (GAO-15-73), so it pays to find them.
How to trace it
- Check your tax records. A Form 1099-R from the plan shows the payout or rollover. A Form 5498 from an IRA provider, filed every year the IRA exists, shows where it landed. IRS Wage and Income transcripts cover the last 10 years.
- Ask the plan. Request the distribution record: date, amount, recipient, and the name of the IRA provider.
- Check unclaimed property. Uncashed checks and long-unclaimed IRAs can be sent to the state of your last address, listed under the IRA provider's name rather than the employer's.
Attovar's report shows each plan's own payout limit when its filings state it.
Sources
- Milliman: SECURE 2.0 mandatory cash-out limit raised to $7,000
- GAO-15-73: Automatic Rollovers of 401(k) Accounts
- MissingMoney (state unclaimed property)
Reviewed October 2026. Information only, not legal or tax advice.