Every week I talk with individual 401(k) retirement plan participants. The current work at home environment makes for easy phone calls or video conference.
The person who invented the work phone to “rollover” to a personal cell phone. I nominate you for the Nobel Peace Prize. But I digress.
Individual 401(k) participants have more time on their hands. They can take time to rethink their 401(k) investment management strategy options.
The “buy-and-hold” 401(k) investment management strategy has failed again. It has proved to be an expensive lesson over the last few weeks.
Now that you have time, ask yourself the following investment management question?
“Have you and your spouse or partner taken the time to review each of your 401(k) retirement plan accounts?”
Every company 401(k) retirement plan has good and bad elements. But you must know what to look for. You need to find the best possible 401(k) investment options for your household.
The most important consideration is 401(k) mutual fund annual fees and expense ratios. Next, rank the investment performance for all your default 401(k) mutual funds.
You want to own the 401(k) mutual funds with the lowest annual cost. And the best annual investment performance. There are no more than three or four mutual funds on any company 401(k) retirement plan menu that would qualify.
One company 401(k) retirement plan menu in your household may have a great index mutual fund option. The other plan menu may have a great small or mid cap growth mutual fund option.
I have some 401(k) investment advice clients who unfortunately have none of the above. One or both of their household 401(k) retirement plan menus are expensive. With only under-performing mutual funds.
There is sometimes good news. One household member 401(k) may include a SDBA (self-directed brokerage account) option.
The self-directed brokerage account is a brokerage account within your 401(k) account. In this account, you can buy most any mutual fund or ETF (exchanged traded fund) available.
You are not limited to high-cost and poor-performing mutual fund options. Instead, you can own the cheaper and better mutual funds and ETFs in your 401(k).
Find out if have the SDBA self-directed brokerage account option in your 401(k) account. If you do, your cheaper and better 401(k) problems are gone.
Find the answer. And compare your 401(k) options. You can make more informed 401(k) investment management decisions for your household.
With more options and at a lower cost.
Ric Lager
I have spent the last several years trying to figure out the best way to share my 401(k) advice content. I have tried Twitter, Facebook, company web site, and LinkedIn Groups. I now realize nothing beats a well-crafted newsletter delivered to your inbox once a week.
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