Can you imagine forgetting about tens of thousands of dollars of invested funds? While this may seem like something only the super-rich would do, the reality is that working Americans are accidentally abandoning their hard-earned money every day.

That abandoned money exists in part in the form of 31.9 million forgotten 401(k) accounts, which Capitalize (1) reports held a combined $2.1 trillion in assets in 2025.

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You can track down these assets using services like the U.S. Department of Labor’s Retirement Savings Lost and Found Database (2) or by contacting former employers. But say you do track down an abandoned account: What’s the next step?

Let’s imagine, for example, that Juan, 45, worked at a car dealership in his 20s and contributed money to his 401(k). He left the job at 25, completely forgot about it, and recently received a letter from the plan administrator warning that the company will start charging a monthly non-employee maintenance fee (3) if he doesn’t transfer the account.

Now, thanks to appreciation, Juan has $25,000. He has to decide what to do with the money. What are his options?

Here are a few potential things he can do.

Juan can choose to leave the money where it is if he wants to. But this usually would be a bad idea, since he’s been warned he’ll now owe fees.

Research from PensionBee (3) revealed that the monthly maintenance fees you often pay when you abandon an old 401(k) account can add up dramatically because of lost compounded investment returns.

In fact, according to their analysis, if you work for 33 years, change jobs every three years, earn 5% returns minus average 401(k) fees, and the fees for keeping the old account total just $4.55 per month, the long-term costs of those added fees can total almost $18,000 over time, including lost compounding.

There’s no reason for Juan to lose money to an extra administration fee every single month when there are other, better solutions.

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Juan’s next option is to roll the money into his new employer’s 401(k).

This can be a convenient solution if he’s already contributing to his current employer’s plan. Juan could avoid managing multiple accounts and keep all of his retirement dollars with his new employer, so he can easily see his overall asset allocation and future retirement income projections.

Unfortunately, many 401(k) accounts do have limited investment options (4) compared to other types of retirement plans. The investments may have higher fees, and there may also be administration costs associated with the new plan.

Plus, if Juan leaves his current employer, he’s going to have to move all this money somewhere else, or risk forgetting about it again.

Rolling the money into an IRA is another alternative, and can be a good option.

Juan can open a traditional IRA with nearly any brokerage firm, and moving a traditional 401(k) into a traditional IRA shouldn’t have any tax consequences.

Juan can choose any brokerage account for his IRA, and he will get access to a huge range of investments. So he can do things like buy mutual funds, ETFs, and shares of individual stocks. He could even opt for an IRA that allows investments in alternative assets, depending on his interests and risk tolerance.

An IRA provides the most control over the invested money, and Juan won’t have to worry about moving it again if he leaves his current job.

Juan should arrange a direct rollover (5) so the money moves right from the 401(k) into the new IRA without any risk of tax consequences. He could also request a check from his current 401(k) provider and deposit it directly, but if he doesn’t deposit the check within 60 days (6), then it could be treated as a withdrawal, and therefore taxable income.

Finally, Juan could withdraw the money, but that’s likely an expensive option. Withdrawals before (7) age 59.5 are subject to a 10% penalty unless you fall within a narrow exception, plus you will owe taxes on that money because it counts towards your income. Juan would also be missing out on future returns that would have been earned over time.

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Capitalize (1); U.S. Department of Labor (2); Business Wire (3); Investopedia (4); Internal Revenue Service (5), (7); Fidelity (6)

This article originally appeared on Moneywise.com under the title: I’m 45 and I just found out about a 20-year-old 401(k) account with $25,000 in it. Where should I put the money?

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.