The biggest complaint I hear from individual Minnesota company 401(k) retirement plan participants is the lack of good investment options on their retirement plan menu.
Some household name Minnesota companies that have less than ten mutual fund options on their company 401(k) retirement plan menu. Many of those mutual funds have severely lagged the investment performance of the U.S. stock markets over the last few years.
Your 401(k) money is sacred. It represents decades of work and sacrifice. Would you be interested in a better company 401(k) retirement plan option if it is available to you?
Don’t feel constrained by the company 401(k) retirement plan limits imposed by your employer. Many Minnesota company 401(k) retirement plan participants have a brokerage window option available to them. Most of those participants don’t realize it.
In many company 401(k) retirement plans this option is described at the SDBA (self-directed brokerage account) option. This brokerage window option allows for investments outside of the plain vanilla default mutual fund menu.
Some brokerage window options include an expanded list of mutual funds. Most brokerage window options allow for the purchase of any listed stock, mutual fund, or exchange traded fund.
A brokerage window option allows you to open a self-directed brokerage account within your existing company 401(k) retirement plan account. In that account, you can own cheaper and better performing company retirement plan investments.
The brokerage window option is not well advertised by your company retirement plan provider. They want you to buy-and-hold the main menu of mutual funds forever. That is how they make the largest amount of fee income from the company 401(k) retirement plan participants.
Call your Human Resources Department and ask if you have a brokerage window options available to you. Or just call your company 401(k) retirement plan provider. The SDBA brokerage window option is in most cases a cheaper and better investment performance option. It is in your best company 401(k) retirement plan interest to find out if you have that option.
Ric Lager
Lager & Company, Inc.
