Executive Summary
Millions of workers in the United States have lost track of their own retirement savings amid job changes, fragmented systems, and administrative barriers. An estimated $2.1 trillion sits in roughly 32 million lost or forgotten 401(k) accounts, averaging $66,691 per account. That total has nearly doubled in the past decade, driven by layoffs and frequent job changes. For workers living on on low and moderate incomes (LMI),1 these accounts represent life-changing wealth that workers have already earned and set aside for their futures.
The equity gap is stark—households earning under $50,000 are roughly twice as likely to have a lost account as higher-income households. Without intervention, employers often move small, inactive accounts into safe harbor IRAs where high fees and low returns erode the balance over time. One industry expert noted that a $7,000 account that has been put into a safe harbor IRA could fall to $0 within nine years. The process to recover these accounts is long, manual, and riddled with friction. Roughly 80% of rollovers still require a manual step, including phone calls, paperwork, identity verification, or mailed checks, and each step creates a potential drop-off point. Left unrecovered, workers’ wealth erodes silently and widens the retirement savings gap for the workers who can least afford it.
Our research and analysis revealed opportunities for features that can be embedded within existing products and touchpoints, and position banks and credit unions as trusted partners in reclaiming what workers have already earned. These solutions create value on every side. Recovering lost retirement wealth benefits financial institutions and workers alike. Financial institutions gain new asset and advisory relationships, brand differentiation as a trusted partner, and scale through offering solutions to a full customer base. Workers living on LMI avoid fee erosion, consolidate savings for long-term financial security, gain trusted guidance through a fragmented process, and recover meaningful amounts of lost wealth.
Commonwealth’s research, conducted in partnership with the Wells Fargo Foundation, identifies a clear opportunity for banks to support their customers in recovering their lost or forgotten retirement wealth. Banking features, such as proactive alerts, AI-powered tools, and step-by-step guided experiences can meaningfully help customers recover their lost retirement accounts.
The research points to three findings:
1.
Job transitions are the critical moment for financial institutions to help customers preserve their retirement wealth
2.
Reducing friction is the greatest opportunity for financial institutions to increase customer action
3.
End-to-end support is where financial institutions turn discovery into reconnection
The Business Case for Banks and Credit Unions
Recovering lost retirement wealth is not a zero-sum transaction. Done well, it creates value across the entire ecosystem—positioning financial institutions as partners recovering wealth, not extracting it. Banks and credit unions hold the customer relationships, payment data, and trusted touchpoints that make recovery possible.
For financial institutions
- Relationship building with customers: Reconnecting workers with retirement wealth opens the door to ongoing advisory relationships, investment products, and wealth management services.
- Brand differentiation: Positioning the institution as a trusted partner in wealth recovery builds customer goodwill and loyalty.
- Scale and reach: Building and offering a solution to this issue that many customers have been struggling with creates deep impact in the financial lives of customers.
- Regulatory alignment: Supporting recovery aligns with emerging federal policy priorities such as SECURE 2.0 and Department of Labor guidance on missing participants.
For workers living on LMI
- Immediate impact: Recovering accounts prevents erosion caused by high fees and low returns in safe harbor IRAs.
- Long-term security: Consolidated accounts may support long-term wealth building and retirement readiness.
- Reduced friction: Trusted guidance and digital tools eliminate the burden of navigating a fragmented system on their own.
Lost wealth recovery
Many of these lost or forgotten accounts hold meaningful wealth for workers that they may not recover without intervention or support.
Our Research Key Findings
Commonwealth conducted a comprehensive study of the lost retirement account landscape in order to identify interventions to support workers in the recovery of their lost or forgotten retirement wealth. This work drew on landscape research, expert interviews with industry stakeholders, a national survey, in-depth interviews with workers who had lost, recovered, or attempted to recover retirement accounts, and focus groups to identify which features and solutions resonated most strongly with participants.
We found that financial institutions have a unique opportunity to intervene in the recovery of lost retirement wealth with their customers. Banks and credit unions already hold customer relationships, payment data, and trusted touchpoints. By designing features that meet workers at moments of financial transition, institutions can help customers recover lost wealth, build lasting loyalty, and generate meaningful business value.
Finding #1 Job Transitions Are the Critical Moment for Financial Institutions to Help Customers Preserve Their Retirement Wealth
Job transitions are when retirement accounts are most likely to be left behind and when intervention is most effective. The problem is not that workers are unaware of their accounts (at least at first). It is that they are overwhelmed at the moment of job transition—and once a new role begins, the old account fades from view.
what workers told us
One in five Americans have a-left behind retirement account.
Workers average nine to twelve jobs over their lifetimes, encountering this risk repeatedly.
Our research found that life disruptions (i.e., job loss, relocation, financial hardship, name or address changes) are the top trigger for lost or forgotten retirement accounts and sharply increase administrative breakdowns, resulting in outdated addresses and missed notices.
When leaving a job, workers often adopt a “fresh start” mindset, focused on what is ahead rather than what is left behind.
Interventions must be timed to the moment of disruption, not months later.
A trusted notification from a financial institution within 90 days of a change to payroll or direct deposit may represent the single most effective leverage point in the system.
What Financial Institutions Can Do:
Nudge customers to take action or notify customers that they are “at risk” of losing retirement wealth during workforce transitions
Deliver timely reminders that urge customers to take action before retirement savings are left behind during payroll and direct deposit changes.
Impact
- Creates a sense of urgency and surfaces the real cost of inaction.
- Increases customer awareness that they may be at high risk of losing a retirement account based on behavioral signals (e.g., a change in direct deposit).
- Provides a low-lift first touchpoint to initiate a relationship focused on retirement wealth recovery.
Features
- Proactive alerts for ACH and direct deposit changes: Use existing infrastructure, such as payroll change notifications, to send plain-language alerts flagging deposit changes and possible lost or forgotten retirement account risk.
- Triggers tied to life events: Prompt customers to identify lost retirement accounts when they take other financial actions, such as opening an IRA.
Finding #2 Reducing Friction Is the Greatest Opportunity for Financial Institutions to Increase Customer Action
Financial institutions have an opportunity to improve retirement asset recovery by supporting customers through the entire rollover journey, not just helping them locate lost or forgotten accounts. Even among workers who know they likely have a lost retirement account, initiating the recovery process is a significant hurdle. The barrier is not financial literacy. It is structural friction, low urgency, and an absence of a clear starting point.
what workers told us
More than half of survey respondents (57%) reported having one or two lost or inactive accounts.
Of those with lost accounts, more than one in five (22%) either had not started the recovery process at all or had not completed it.
Many workers do not know that public tools like the Department of Labor Lost & Found or PBGC database exist, or where to begin.
Phone call-only processes and support are major deterrents.
Workers who are aware of fintech solutions still face paperwork, identity verification, and account-opening hurdles, as well as concerns about trust and perceived conflicts of interest.
Solutions must reduce or eliminate the burden of getting started and reduce drop-off points.
This means designing a process that will make recovering lost retirement wealth as low-effort as possible to mitigate the structural friction standing in the way.
What Financial Institutions Can Do:
Simplify the customer journey with AI-powered guidance or customer support
Offer a third-party proxy, such as an AI tool, financial advisor, or hybrid that handles both the decision-making and the bureaucratic legwork of locating and recovering a lost account. Ideally, the service completes the process from start to finish on the customer’s behalf.
Impact
- Supports customers who want the process done for them, with no do-it-yourself required.
- Reduces friction across the entire recovery journey, especially the messy middle.
- Prevents disengagement through proactive touchpoints and status updates.
Features
- Full-service concierge option: A financial advisor or AI-powered proxy service that executes tasks on behalf of the customer after receiving appropriate permissions and guidance.
- Guided chat experience: An AI-powered chat with guided prompts to help customers get started quickly, built-in support for troubleshooting, and structured decision-making support.
- Proactive status updates: Regular updates at each stage of the recovery process, so the customer knows it is moving forward without needing to check in.
Finding #3 End-to-End Support Is Where Financial Institutions Turn Discovery into Reconnection
While getting started is one barrier, finishing is another. Our research found that many customers abandon the process before completing a rollover due to complex decisions, cumbersome verification requirements, and fragmented digital experiences. Even workers who successfully identify and begin the recovery process encounter friction points that lead to drop-off before accounts are reclaimed and reinvested. Discovery does not guarantee reconnection.
what workers told us
Workers report being overwhelmed by options and financial jargon at the Claim and Decide stage, and by long wait times and verification difficulty during the Search and Verify stage.
Login and access failures are a practical, underappreciated barrier to consolidation.
Workers who cannot access old employer email accounts or recordkeeper portals frequently abandon the process.
Respondents identified the top three features they wanted in a rollover tool:
Electronic payments and transfers
Clear communication of the steps involved
Calculator for taxes, penalties, and fees for those considering caching out
Solutions must address not just discovery but the full path to reinvestment.
This means providing end-to-end support, from the initial nudge through the completed rollover, with regular touchpoints, proactive troubleshooting, and guidance through bureaucratic hurdles. However, an AI service or a financial advisor completing this process is not right for every customer. Our research found that many customers want to feel that they have full control over this process.
What Financial Institutions Can Do:
Guide customers through every step to completion
Provide a guided, tax preparation-style experience that walks customers from discovery to a completed rollover, with progress tracking and built-in workarounds for the moments they are most likely to get stuck. Customers can complete recovery themselves when guided by their financial institution to better understand the steps involved.
Impact
- Supports customers who want to do it themselves with expert scaffolding available when needed.
- Reduces drop-off at the Search and Verify and Claim and Decide stages by providing transparency and predictability.
- Builds trust by making the process legible and the institution’s role explicit.
Features
- Step-by-step workflows: End-to-end explanations and guidance from initiation through the completed rollover.
- Progress tracking: Clear completion indicators at each stage.
- Embedded workarounds: Credible alternatives for stuck points (e.g., employer contact templates, escalation paths, calculators for rollover vs. cash-out tradeoffs).
The Opportunity
These findings point to a sizable and largely untapped opportunity. Financial institutions are uniquely positioned to help workers reclaim retirement wealth while building lasting customer loyalty in the process. For workers living on LMI, lost retirement accounts can represent life-changing wealth. According to Commonwealth’s national survey, 39% of respondents living on LMI held more than $40,000 in retirement savings, a meaningful portion of which may be sitting in lost or left-behind accounts. However, the current system places the full burden of tracking, securing, and recovering these savings on the worker, precisely when they are least equipped to manage it.
Workers interviewed in Commonwealth’s research pointed to concrete, addressable obstacles: not knowing where to begin, phone-only processes, mailed-check requirements, and paperwork errors that create drop-off points before recovery even begins. A “messy middle” of login failures, verification difficulty, and overwhelming options causes further abandonment.
Proactive outreach is the most effective and simplest solution. According to our national survey, nearly half (49%) of workers who reclaimed a left-behind account did so because their employer or plan provider contacted them, making direct outreach the single biggest motivator for reconnection.
39% of respondents living on LMI held more than $40,000 in retirement savings
Where to Start
Financial institutions can begin with the highest-leverage entry points, sequenced by impact and effort
Highest-impact, lowest-effort
- Proactive alerts tied to ACH and direct deposit changes
- Embedded lost-account prompts inside existing IRA flows
- Incentives to search for lost retirement accounts (e.g., fee waivers, seed contributions, advisor sessions)
- Educational content on the likelihood of having a lost account
High-impact, moderate-effort
- Lost retirement account-specific guided chat with prompt suggestions; tax preparation-style guided recovery experience
- AI-powered concierge and financial advisor support that executes on the customer’s behalf
- Embedding recovery into new IRA opening or other bundled activities
- A search-and-consolidation model in which fees apply only after an account is located and the process is complete
Supporting tools
- Email templates for contacting past employers and recordkeepers
- Step-by-step and materials overviews
- Life-event triggers (e.g., IRA setup, estate planning); a designated lost retirement account awareness day or month
Longer-term opportunity
- Partnerships with large employers to mandate an annual lost retirement account search, similar to open enrollment for healthcare
Conclusion
Workers are ready for additional support in recovering their retirement wealth, particularly at moments of transition when a trusted nudge matters most.
The path forward is clear. Proactive alerts, AI-powered guidance, and end-to-end support can turn a high-friction, fragmented process into a trusted pathway to financial security.
The retirement wealth already exists, and the workers who earned it are waiting. Financial institutions that build the bridge between the two will earn lasting customer trust, brand equity, and business growth.
Thank you to Commonwealth research, program, and communications team members: Cali Apodaca, Gabrielle Barnes, Emily Bergman, Dana Davenport, Stephanie Epps, Haydee Moreno, Robert Levey, Lizelle Rumao, Brenda Velazquez, and Teresa Willand.
Commonwealth is a national nonprofit building financial security and opportunity for low and moderate income households through innovation and partnerships. For over two decades, Commonwealth has designed effective innovations, products, and policies enabling nearly 2.5 million people to save nearly $9 billion. Commonwealth collaborates with consumers, the financial services industry, employers, and policymakers. Because Black, Latin, and women-led households disproportionately experience financial insecurity, we focus especially on these populations. The solutions we build are grounded in real life, based on our deep understanding of people living on low and moderate incomes and how businesses can best serve them. To learn more, visit us at www.buildcommonwealth.org.
- Defined as annual income between $25,000 and $80,000. ↩︎