401(k) rollovers are a major stumbling block for retirement savings. Whether workers forget to transfer their savings or actively cash them out, botched rollovers cost Americans billions of dollars every year. But experts say a solution to this problem already exists — it just hasn’t fully caught on yet.
That solution is a plan feature called auto-portability. The concept is simple: When a worker changes jobs, the balance in their old retirement account is transferred automatically to the new one. The employee is notified and given an option to opt out, but if they want their savings all in one place, they don’t have to do anything — the rollover happens by default.
