investing

Dormant Accounts Pose a Risk for Buy-and-Hold Investors

If you haven't been in contact with your investment firm, your state may be quicker to seize your account as abandoned property.

My mutual fund company sent a letter saying that if it doesn’t hear from me soon, it will turn over my account assets to the state. My address hasn’t changed. How could this happen? - G.P., Baltimore

Many states changed their abandoned-property laws and now take over accounts much earlier than they used to. This is a growing problem for buy-and-hold investors.In the past, financial institutions would turn over accounts to the state as abandoned if they hadn’t heard from you for seven years after mail to you had been returned as undeliverable. Now, many states can take over your account if a financial institution hasn’t heard from you for three or five years, even if your address hasn’t changed, says Tamara Salmon, associate general counsel for the Investment Company Institute, a mutual fund trade association (see ici.org/lost_property for details).

You can file an abandoned-property claim and get your money, but you may miss out on any gains or dividends after it was sold because the state can liquidate your assets. (Search your state’s database at unclaimed.org or missingmoney.com.)

Salmon advises contacting your financial institutions at least every three years to let them know an account is active. Even logging into your account online can count as activity at some firms. And respond to any letter like the one you received—after verifying that it’s legitimate.

Most Popular

Tax Wrinkles for Work-at-Home Employees During COVID-19
taxes

Tax Wrinkles for Work-at-Home Employees During COVID-19

Are your home office expenses deductible? How does going out of state to work for a while affect your tax picture? There are some interesting wrinkles…
November 9, 2020
Retirement: It All Starts with a Budget
personal finance

Retirement: It All Starts with a Budget

When you’re meeting with your financial planner, do you talk about your budget? If not, you should.
November 10, 2020
Will Joe Biden Raise YOUR Taxes?
taxes

Will Joe Biden Raise YOUR Taxes?

During the campaign, Joe Biden promised that he would raise taxes for some people. Will you be one of them?
November 10, 2020

Recommended

The Best T. Rowe Price Funds for 401(k) Retirement Savers
Kiplinger's Investing Outlook

The Best T. Rowe Price Funds for 401(k) Retirement Savers

A dozen T. Rowe Price mutual funds also have a place among the nation's most popular 401(k) retirement products. Find out which funds belong in your r…
November 27, 2020
The Best Fidelity Funds for 401(k) Retirement Savers
Investing for Income

The Best Fidelity Funds for 401(k) Retirement Savers

Fidelity funds are renowned for their managers' stock-picking prowess. We rate Fidelity's best actively managed funds that are popular in 401(k) plans…
November 27, 2020
The Best Vanguard Funds for 401(k) Retirement Savers
mutual funds

The Best Vanguard Funds for 401(k) Retirement Savers

Vanguard funds account for a third of the 100 most popular 401(k) retirement products. We rank Vanguard's best actively managed funds, including its t…
November 27, 2020
The Best American Funds for 401(k) Retirement Savers
mutual funds

The Best American Funds for 401(k) Retirement Savers

American Funds has 14 actively managed mutual funds among the 100 most popular 401(k) offerings. We look at the Best American Funds in that group, and…
November 27, 2020