Investing money in your company 401(k) account is designed to build your retirement nest egg wealth. But it is not as easy as sending your payroll and company-matching deductions away with no attention paid to your annual costs and investment results.
Each company 401(k) retirement plan menu I analyze has a unique set of features. Unfortunately, most individual investors guess at a handful of mutual funds to own and fall desperately into “buy-and-hope” mode for the next several years.
Successful long-term company 401(k) investing requires the ownership of the best asst class and individual mutual funds available to you. The problem is that most company 401(k) retirement plan default menus are too restrictive in the options available to you.
Have you ever wished your company 401(k) retirement plan had more choices? Hold that thought, and that wish. Let me answer that question with a question.
Have you ever taken the time to find out if your company 401(k) retirement plan account includes an SDBA (self-directed brokerage account) option?
Earlier this month, I talked to two people at different large companies in my local market. Each person has worked at their company for over 10 years. Each person did not know about the SDBA option on their company 401(k) retirement plan menu.
I casually searched company 401(k) database web sites and found the self-directed brokerage account options. Each of these company employees have received hundreds of personal mailings and e-mails over the years. But were unaware of the features and benefits right under their company 401(k) noses.
The self-directed brokerage account is a traditional brokerage account option inside your company 401(k) retirement plan. In that self-directed account, you can own no cost mutual funds and exchanged traded funds.
One company 401(k) investment advice client of mine recently decided to own a cryptocurrency in his SDBA. A couple of months ago, another 401(k)advice client of mine took deliver of a new Tesla. So, he decided to buy the same stock in his self-directed 401(k) brokerage account.
In one strategic move, you can lower your annual costs and potentially improve your investment returns in your self-directed company 401(k) account. You can move a portion or the entire balance in your company 401(k) to the self-directed account option.
The start of a new year is a great time to find out about new and improved company 401(k) investment management strategies. The self-directed brokerage account option may be first step to a more successful 2021 in your 401(k).
Ric Lager
Lager & Company, Inc.
