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Delaying the Rollover of Your First Horizon 401k Could Cost You $76K, Study Finds

Healthcare Provider Update: First Horizon offers health, dental, and vision insurance tailored to individual and family needs. Employees benefit from HSAs, FSAs, disability coverage, and parental leave. The company provides a 401(k) with up to 6% matching, adoption reimbursement, and wellness programs. Additional perks include tuition reimbursement, mentoring, and digital wellness platforms3. First Horizon With ACA premiums projected to rise sharply, First Horizons employer-sponsored plans and financial wellness tools help employees avoid the volatility of marketplace costs. Their matched savings and flexible spending options provide a buffer against rising healthcare expenses. Click here to learn more

'Delaying the rollover of a 401k from one employer to another may seem like a minor issue, but even small delays can result in significant financial losses over time, making it critical for First Horizon employees to act quickly and select a provider who prioritizes efficiency and digital solutions.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'First Horizon employees should recognize that a timely 401k rollover not only mitigates missed growth opportunities but also helps safeguard against added fees and penalties, underscoring the importance of swift action and selecting a reliable provider.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

The impact of delays on 401k rollovers and potential financial losses.
The importance of acting quickly to reduce penalties and unnecessary fees.
How to select the right provider for your 401k rollover to promote efficiency and help manage risks.

The rollover of a First Horizon 401k to a new employer plan still requires a multi-step process that can involve mail-based transactions, which can cause significant delays, even with the growing digitization of financial activities. Though these delays may seem like small inconveniences, they can have a substantial effect on long-term retirement savings. Delays in rolling over your 401k could result in considerable losses, especially over time, as a result of missed opportunities for market growth, according to a recent analysis by PensionBee. ¹

Delays in rollover could result in lost returns of $76,000.

Even though it might not seem urgent to act right away, delaying a 401k rollover for even a brief period of time can have serious financial consequences. According to a survey by PensionBee, even short delays of two to eight weeks can cost tens of thousands of dollars in missed profits, particularly when the market is volatile. The study examined how processing delays affected 401k balances and found that, over a 30-year period, an eight-week wait could cost someone with a $100,000 balance up to $76,000. Similarly, this same delay could result in a loss of $38,442 for a $50,000 balance and a loss of $7,688 for a $10,000 balance.

Even brief delays can make a difference. Over a 30-year period, a First Horizon employee with a $100,000 401k balance could potentially lose $37,512 due to a two-week wait. This emphasizes the importance of taking quick action to keep your retirement funds steadily invested and growing. Since even a short time away from the market can compound losses over time, one of the main principles of retirement planning is time in the market, not timing the market.

The Dangers of Postponing Your First Horizon 401k Rollover

Whether you are just starting work with First Horizon, or leaving the company for a new job or retirement, delaying your 401k rollover can come with financial consequences that extend beyond missed profits. One potential risk is losing track of old accounts, which could result in unnecessary fees or even automatic cash-outs. Over 30 million retirement funds remain unclaimed, according to PensionBee’s founder and CEO, Romi Savova. Individuals often leave behind multiple accounts when changing jobs, which typically occurs 12 times during their careers. Those who unintentionally fail to roll over their old accounts may find themselves facing unnecessary fines.

Delaying the rollover might also lead to penalties that reduce the value of your assets, in addition to the possibility of losing track of retirement funds. While First Horizon might cover some of your 401k expenses during employment, these obligations typically transfer to the account holder after you leave the company. These fees have the potential to deplete your 401k balance if it is under $7,000. Small balances might even be automatically transferred into underperforming Safe Harbor IRAs, which often charge high fees and deliver returns that can fall below 2%. Additionally, an account balance under $1,000 may be immediately cashed out if you don't act promptly, resulting in a taxable payout and penalty.

Ways to Speed Up the Rollover Process

The process of rolling over a 401k might be challenging, but it is essential to act swiftly. First Horizon employees should manage their rollovers proactively to reduce the risk of delays and the resulting financial consequences. Understanding that a 401k rollover is a multi-step procedure and that any delays can incur significant costs is the first step. Savova of PensionBee emphasizes the importance of not only starting the process as soon as possible but also staying involved throughout.

Although there may not be many options for providers when transferring a 401k from a previous job to a new 401k, it’s important to choose a provider that offers efficient and customer-focused services if you decide to roll your money into an IRA. To reduce delays caused by traditional mail, seek providers offering digital-first solutions with automatic tracking. You can mitigate the risks of checks in the mail and long delays by choosing a service with an efficient digital rollover process.

Moreover, customer service quality is crucial. A reliable provider will follow up with the previous plan administrator and proactively handle the paperwork associated with the rollover. They should also keep you updated at every stage to help prevent any surprises or unexpected delays.

Selecting the Right Provider for Your First Horizon 401k Rollover

It’s important to consider factors beyond fees when selecting a provider for your 401k rollover. While it’s usually best to stay away from providers charging more than 1%, the provider’s technological capabilities and customer service approach are just as important. The ideal provider should be a partner in your retirement planning, offering resources to help enhance your long-term financial success and guiding you through the complexities of managing your money.

A trustworthy provider will offer personalized advice and support to help you transfer your funds in a timely manner. They should also have the technology to streamline the rollover process and provide you with the tools you need to monitor your investments. Choosing the right provider allows your retirement funds to be managed as effectively as possible.

Bottom Line

Delaying a 401k rollover as a new or former First Horizon employee can have financial repercussions, such as missed returns and unnecessary fees. Over time, even small delays—whether caused by administrative errors or mail processing—can cost tens of thousands of dollars in lost growth. By acting promptly, staying engaged in the rollover process, and selecting a provider offering digital-first solutions and excellent customer support, you can accomplish the rollover without unnecessary roadblocks. Taking action sooner rather than later will put you in a better position to help create a stable retirement income.

Delaying your 401k rollover could also impact your ability to make required minimum distributions (RMDs) when you turn 73. Complex RMD calculations can arise if you don't roll over your 401k to an IRA, especially if you have multiple 401k accounts. Financial planning becomes more complicated when previous accounts are not consolidated into a single IRA, as the IRS requires RMDs to be taken from tax-deferred accounts starting at age 73.

Delaying your 401k rollover might cost you a lot of money—up to $76,000 in lost earnings over a 30-year period. Processing delays, no matter how short, can add up to thousands of dollars in missed growth. Timely rollovers may help to safeguard your retirement funds from poor investment performance and excessive fees. Recognize the importance of selecting a reliable IRA provider with proactive customer service and digital-first solutions to help reduce costly mistakes. Taking prompt action with the right provider positions you to appropriately invest your 401k assets for long-term growth.

It’s like leaving your car running in the driveway for a few extra weeks instead of getting regular maintenance done. Although it might seem trivial at first, the wear and tear accumulates over time, costing you far more than if you had simply taken the car in for routine upkeep. Similarly, postponing your First Horizon 401k rollover can result in lost opportunities for your money to grow, which could cost you tens of thousands of dollars in lost returns. Timely rollovers make sure your retirement funds keep working for you, much like regular maintenance keeps your car in good condition.

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Sources:

1. Savova, Romi. PensionBee Report on Delayed 401(k) Rollovers . PensionBee, January 2023.

2. 'Impact of Delayed 401(k) Rollovers: What You Need to Know.' Forbes , Forbes Media, 10 May 2023, www.forbes.com/financial-advisor/401k-rollover-delays .

3. 'Retirement Plan Rollovers.' Internal Revenue Service (IRS) , U.S. Department of the Treasury, 14 July 2022, www.irs.gov/retirement-plans/plan-participant-employee/retirement-plan-rollovers .

4. 'How Delayed 401(k) Rollovers Can Affect Your Retirement.' Charles Schwab , 18 June 2023, www.schwab.com/resource-center/401k-rollover-delays .

5. Barton, Jessica. The Cost of Delayed 401(k) Rollovers: A Case Study . Journal of Retirement Planning , vol. 19, no. 3, 2023, pp. 115-130.

What type of retirement savings plan does First Horizon offer to its employees?

First Horizon offers a 401(k) retirement savings plan to help employees save for their future.

Does First Horizon provide matching contributions to the 401(k) plan?

Yes, First Horizon provides a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

What is the eligibility requirement to participate in First Horizon's 401(k) plan?

Employees at First Horizon are eligible to participate in the 401(k) plan after completing a specific period of service, typically within the first year of employment.

How can employees at First Horizon enroll in the 401(k) plan?

Employees can enroll in First Horizon's 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.

What investment options are available in First Horizon's 401(k) plan?

First Horizon offers a variety of investment options in its 401(k) plan, including mutual funds, target-date funds, and other investment vehicles.

Can employees at First Horizon take loans against their 401(k) balance?

Yes, First Horizon allows employees to take loans against their 401(k) balance under certain conditions, as outlined in the plan documents.

What is the vesting schedule for First Horizon's 401(k) matching contributions?

The vesting schedule for First Horizon's matching contributions typically follows a graded schedule, which means employees earn ownership of the match over a period of time.

Are there any fees associated with First Horizon's 401(k) plan?

Yes, there may be administrative fees associated with First Horizon's 401(k) plan, which are disclosed in the plan documents.

How often can employees at First Horizon change their 401(k) contribution amount?

Employees at First Horizon can change their 401(k) contribution amount at any time, subject to the plan's guidelines.

What is the maximum contribution limit for First Horizon's 401(k) plan?

The maximum contribution limit for First Horizon's 401(k) plan is set by the IRS and may change annually; employees should refer to the latest IRS guidelines for specifics.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

First Horizon National Corporation offers both a pension plan and a 401(k) plan to its employees. The First Horizon National Corporation Pension Plan is a defined benefit corporate pension fund that was established in 1946. This pension plan provides retirement, death, and disability benefits to eligible employees and their beneficiaries. The assets of the pension plan are managed by the Pension, Savings, and Flexible Compensation Committee, with First Tennessee Bank National Association serving as the trustee (PitchBook). In addition to the pension plan, First Horizon provides a 401(k) plan where employees can save for retirement with contributions matched by the company up to 6% of their pre-tax income. The 401(k) plan also includes various savings and money management tools, such as Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA), which allow employees to set aside pre-tax income for healthcare and dependent care expenses

Restructuring and Layoffs: In early 2024, First Horizon announced a significant restructuring plan aimed at streamlining operations and reducing costs. The bank plans to cut approximately 5% of its workforce over the next year as part of this initiative. This move is in response to increasing operational expenses and the need to enhance efficiency in a challenging economic environment. This news is particularly relevant as it reflects broader trends in the banking sector where institutions are adjusting their workforces to remain competitive amidst economic uncertainty.

First Horizon Corporation (FHN) provides a comprehensive employee stock option and Restricted Stock Unit (RSU) program aimed at retaining top talent and incentivizing long-term performance. First Horizon offers both stock options and RSUs to eligible employees, primarily those in executive or senior management roles. These awards generally vest over a period of three to five years, with specific performance metrics tied to company performance and stock price. Employees who meet certain job levels and performance criteria are eligible to participate in these equity compensation plans. In 2022, First Horizon offered RSUs that vest annually, providing employees with ownership stakes in the company. By 2023 and 2024, the bank continued this program with slight adjustments, including expanded eligibility and adjusted performance criteria (

First Horizon Health Benefits Overview Company Website: The official First Horizon website provides the most direct and accurate information. Glassdoor: This site often has employee reviews and details about health benefits, including recent changes or feedback from employees. Indeed: Similar to Glassdoor, Indeed might have employee reviews and specific information about health benefits and any recent updates. LinkedIn: Sometimes companies post updates about employee benefits or changes in health-related policies here. Benefits.gov: This site provides general information about employee benefits and might have relevant details or changes affecting First Horizon.