I hear individual investors complaints. About the lack of promising 401(k) investment options.
Some household name companies have less than ten mutual fund options on their 401(k) menu. Many of those mutual funds have lagged the investment performance of the U.S. stock markets.
Your 401(k) money too important. It represents decades of work and sacrifice. There are better 401(k) retirement plan options available to you.
Do not feel constrained by the company 401(k) retirement plan limits imposed by your employer. Many 401(k) participants have a brokerage window option available to them. Most of those participants do not realize it.
This 401(k) account option is an SDBA (self-directed brokerage account) option. This account opens a brokerage account window inside of your existing 401(k). This account allows investments outside of the default 401(k) mutual fund menu.
Some brokerage window options include an expanded list of mutual funds. More brokerage windows allow for the buy of any listed stock, mutual fund, or exchange traded fund.
A brokerage window option allows you to self-direct your 401(k). You can own cheaper and better performing 401(k) investments.
The brokerage window option is not 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 401(k) retirement plan participants.
Call your Human Resources Department. Ask if you have a self-directed brokerage window option available to you. Or call your company 401(k) retirement plan provider and ask the same question.
The SDBA brokerage window option is a cheaper and better investment option. It is in your best company 401(k) retirement plan interest to find out if you have it available to you.
Ric Lager
Lager & Company, Inc.
