This article was written by me on October 11, 2011 on my Golden Valley Patch Blog.
Over the last few years, more and more Minnesota company retirement plan sponsors have added the SDBA (self-directed brokerage account) option to their company retirement plan menu.
The SDBA option at your Minnesota company retirement plan sponsor may be referred to by a variety of different names. I have heard it called the “individually directed account,” “personal brokerage account,” “self-directed option,” “self-directed brokerage option,” “self-directed brokerage window” or the “self-directed investment option.”
At the largest company retirement plan providers, SDBA company retirement plan account options have even different names. At Fidelity, this account is called the Fidelity BrokerageLink account. At Charles Schwab, this option in your company retirement plan is named the Schwab PCRA (Personal Choice Retirement Account.) At TD Ameritrade, this account is called the TD Ameritrade SDBA.
The SDBA company retirement plan account option allows a company 401(k)retirement plan participant the ability to invest all or a portion of their company retirement plan account balance in an expanded menu of mutual fund options.
At some Minnesota companies, SDBA accounts allow company retirement plan participant to own individual stocks and the wildly popular ETF’s (exchange-trade funds).
Check with the right people at your company in order to determine if the SDBA option is available in your company retirement plan menu. Or call the 800 number of your company retirement plan provider that can be found on your most recent company retirement plan statement.
If you are less than impressed with the long-term investment performance of the mutual fund options on your main company retirement plan menu, the SDBA option may be a good alternative for you in the future.
Don’t let the poor investment returns of the mutual funds you currently own to discourage you from contributing or monitoring your company retirement plan account. The SDBA option can help you get excited about your Minnesota company retirement plan account again!
Ric Lager
Lager & Company, Inc
