Fidelity’s automatic rollover service helps employees transfer small retirement savings between employers, with over 9,200 401(k) plans adopting the service. Workers often cash out, losing money and compounding opportunities. A law allows for automatic portability services, benefiting 40% of job changers who cash out their retirement accounts. PSN has over 21,000 plans signed up for auto portability, aiding 5.6 million participants.

Former employers typically transfer 401(k) money into IRAs, but balances between $1,000 and $7,000 may be involuntarily rolled over. However, three years later, 75% still have funds in the old account. Cashing out a small account can cost $1,500 in taxes and penalties, compared to a potential $27,580 if it’s rolled over and invested.

Fidelity’s auto portability costs a one-time fee up to $30 for eligible accounts with a balance of $7,000 or less. Moving a small account to a new employer plan increases long-term investment likelihood and engagement. Kerry Hannon, a Senior Columnist at Yahoo Finance, emphasizes the importance of keeping retirement savings intact for optimal growth.

Read more at Yahoo Finance: Why it’s easier now to help job-changing Americans hang on to their savings