Almost 80% of Users Are Unable to Complete A Rollover Without Assistance, and 43% Are Forced To Deal with a Paper Check Despite Annual Rollovers Growing to $1 Trillion In Assets

Capitalize, the first platform to digitally locate and transfer retirement assets, today announced the release of a new white paper: "Stuck In The Past: Why 401(k) Rollovers Remain Outdated and Painful.” This detailed report analyzes the significant challenges that retirement savers face when transferring their legacy 401(k) accounts through increasingly popular 401(k) rollovers, which remain considerably more difficult than other money movement processes.

According to the report, over 10 million 401(k) rollovers are estimated to occur in 2024 with approximately $1.1 trillion of assets rolled into Individual Retirement Accounts (IRAs) and new employer-sponsored accounts. Despite significant growth in these transactions over the past decade, the rollover process remains far less digital than other transfer methods such as ACH or ACATs for brokerage accounts, with only 22% of savers able to successfully complete a rollover transaction without assistance.

Over the past several months, Capitalize conducted a detailed survey of 401(k) accountholders and considered a range of additional data sources on 401(k) rollovers, including proprietary data on its platform. The key findings of this analysis highlight a transfer process that savers perceive as outdated and unnecessarily complex:

• 43% of savers had to deal with a physical check while rolling over their account
• 79% of savers rolling over without assistance had to make at least one phone call to complete their transaction
• Workers wait almost 4 years on average after leaving a job to successfully roll over their legacy 401(k) account
• 54% of savers did not initially know where their legacy 401(k) account was located
• The average unassisted 401(k) rollover takes almost 2 months from start to finish - much longer than the estimated 5 days for ACH transfers and 10 days for ACATs transfers

“Our goal in sharing this data is to highlight the heavy burden placed on savers and their financial institutions to find and transfer retirement assets through the outdated 401(k) rollover process,” said Gaurav Sharma, CEO and Co-Founder of Capitalize. “This process remains a problem for many in the retirement savings system and leads to suboptimal outcomes across the board. By surfacing the struggle of savers and comparing the process to other money movement methods, we hope to spotlight the opportunity for a simpler and more saver-friendly transfer process.”

Since 2020, Capitalize has helped individual savers roll over several billion dollars in retirement assets and helped almost a million Americans find, compare, or roll over a retirement account through its digital platform.

For more information on Capitalize and the results of the white paper, visit the link here.

About Capitalize

Capitalize is the first platform to help consumers and financial institutions digitally locate and transfer retirement assets, such as 401(k)s. Capitalize’s technology is used by leading financial institutions to power rollovers natively for their users and is also available to consumers directly. Capitalize helps Americans better save for retirement by ensuring that they can easily find, transfer, and keep track of their retirement assets. Capitalize has been recognized as one of TIME’s 100 Best Inventions, a World Changing Idea by Fast Company, and a Forbes Top 50 Fintech.

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