These orphan accounts can add to the complexity of managing assets and may not be appropriately invested for the participant’s current age and financial situation. LIMRA SRI research found men and women equally likely to have a DC plan balance with a former employer (41 percent vs. 40 percent). The study found Americans with household assets of at least $500,000 are more likely to have an orphan account (44 percent vs. 38 percent) than those with less than $500,000.
What should advisors do?
Prior LIMRA SRI research shows that pre-retirees and retirees are more confident in their retirement security when they have a comprehensive written retirement plan. In addition, advisors should be helping their clients account for all of their assets to properly ensure their retirement plan is well-designed and invested based on their clients’ needs and resources.