One of my least favorite parts of being an adult is that institutions can just drive by and plop new projects into your lap: I need a letter from my doctor for a jury duty excusal, and that letter must meet very specific formatting requirements. Now I’m liaising between my doctor’s portal messaging system and our local government on the topic of letterhead.

When it comes to American retirement, however, such administrative bloat is more than the subject of carping to your group text: it accumulates to actively imperil our country’s whole experiment with self-funded retirement. Not even exaggerating.

by **Caitlyn Driehorst**

Caitlyn Driehorst is a financial advisor at RightWise Wealth, as well as the firm's founder and CEO. Caitlyn began her career at the Boston Consulting Group and held strategy roles at MGM Resorts, Capital Group American Funds and two venture-backed wealth startups. She holds a B.A. from the University of Chicago and an M.B.A. from UC Berkeley's Haas School of Business.
Published: April 2026

Background on 401(k)s: They’re Quirky!

401(k)s (and their cousins the 403(b)s, and several other similar accounts) are special investing accounts governed by the Employee Retirement Income Security Account of 1974 (“ERISA”), which has been modified several times, including a big update in 2006.

ERISA accounts must meet a laundry list of requirements, including:

Accounts must be sponsored by an employer, who must act as a fiduciary
Plans must provide a limited fund menu that meets certain minimum requirements. It’s rare to have a full universe of investment options within a 401(k)
Plans must provide a default investment that meets certain criteria; this is commonly a target-date fund or managed portfolio
Plans must meet certain means-testing to ensure they benefit all employees, not just highly-compensated leaders, or they must meet “safe harbor” match structures
Married people must list their spouse as their account beneficiary, unless they provide a notarized signature from their spouse waiving that permission

And you’ve had a 401(k) this whole time and maybe never been aware of the gears whirring in the background! Now you know!

Why should you (probably) roll over your old 401(k)?

You probably should roll over your old employer’s 401(k): your employer could shut down the account and not be able to reach you. Your prior plan’s limited investment options may not be optimal. As a former employee, you may be charged higher fees within your account.

But the biggest practical reason to roll over an old account is to consolidate your assets and make life easier for future-you. Lost or forgotten 401(k) accounts is actually a big problem: Capitalize, a fintech firm, estimates that $1.65 trillion in 401(k) accounts may be lost or forgotten. When you retire, you will not only have to remember these accounts and track them down, but you’ll need to sequence and plan withdrawals across your balances. Consolidating accounts along the way can make life simpler.

A note of calibration: of all the incomplete chores that haunt you at 11PM, this is a less-threatening ghost. You should probably get around to this, but you’re probably also at least OK with some procrastination. The underlying investments are required to meet certain fiduciary guidelines, and your money should just be sitting there, still invested.

How does RightWise usually advise rollovers?

Our starting-place recommendation is that clients should roll old 401(k) accounts into their current 401(k), rather than an IRA. This preserves some legal protections on the account and provides optionality for backdoor Roth contributions (which are much less attractive if you have assets held in Traditional IRAs.)

That said, there are scenarios when we would advise rolling over an old 401(k) into an IRA:

You may be in a low tax year, such that this is a great year to roll over your 401(k) or other pre-tax assets into a Roth IRA
You may not have access to a 401(k) with your current employer, and not want old accounts hanging out being pokey, especially if they are smaller
Your current 401(k) may have bad investment options; this is more common if you work for a very small company
Your current 401(k) may not accept roll-ins (I’ve never seen this in real life, though)

In such a case, we will generally advise that you roll over your old 401(k) into a Traditional or Roth IRA, as applicable.

Either way – now the pain begins.

If rollovers are generally advised, then why do they suck so bad?

I went to UChicago for undergrad, where we have a famous “Scav Hunt” known for its oddball quests, such as bringing as many De Loreans to campus as possible or building a nuclear reactor. (Someone did.)

401(k) rollovers can be like that, except for modern tedium. Depending on the plan administrator, quest items can include:

Forcing Millennials to make phone calls
Administrators mailing a paper check to the investor, which then the investor must mail to the new platform
Faxing something, as in, like, with a fax machine?
Technical forms with options that can intimidate a layperson (e.g., asking whether to cash-sweep post-rollover dividends with no help language or layman’s terms – call me a cynic but I suspect that’s a “dark pattern” to encourage abandonment)
A special certified signature (“Medallion guarantee”) to authorize the rollover
A notarized signature from your spouse acknowledging that you’re moving joint property into separate property
A three-way conference call between themselves, the end investor and the service center for the destination platform (this happened to me!)

Why does this suck so bad? Your prior plan has no revenue incentive to make rollovers easier. In fact, employers generally receive better pricing if their plans are larger, so why make it easy to roll out of the plan? There’s also revenue incentives for the platforms: one of my least-favorite players in this space will let you do the rollover instantly online if you use their brokerage platform, but requires a phone call if you are rolling out to any other firm.

Furthermore, administrators generally try to keep costs as low as possible, avoiding investments to upgrade their systems, many of which are antiquated or smashed together from incomplete post-merger integrations.

This is systemically bad!! Recall my earlier point about the volume of retirement assets that are lost, forgotten and abandoned, because we make it a huge chore to migrate accounts. Without exaggeration, this imperils American retirement readiness.

You know what could fix this, says the girl with the Berkeley MBA? Regulation!

“Auto-portability” would require the firms that administer 401(k)s to automatically transfer plan assets when employees change employers: your money would follow your social security number. This regulation – albeit only for plans with small balances – made some progress under the Biden administration. You can guess what’s happened to it recently.

Until regulation comes to save us, consider hiring a financial advisor for help.

This is where I feel a little guilty about pitching my business because I’d hate that we profit from sucky systems, but the advisors at my firm are indeed pretty darn good at helping busy people knock out rollovers.

I can’t promise that you will never need to make a phone call, but we can help you with paperwork, look up instructions, sense-check requirements and poke you when chores are outstanding.

If you’d like to learn more about how working with a financial advisor can bring together strategy, coaching and “chore buddy” assistance, request an introduction. We’d love to chat.