If you are saving money towards retirement, congratulations. You are one of the nearly 26% of Americans who are preparing for their latter years. There are many avenues for savings. Some people are merely using a savings account or high-yield savings account that generates little interest but remains stable. Others are utilizing retirement accounts like an IRA, 403b, or 401(k). I myself, am using a 401(k) to house my retirement funds. While many 401ks offer slim investment choices and possibly good returns, did you know you can opt-in for a self-directed 401(k) account?
What is A Self-Directed 401(k)?
A self-directed 401(k) allows you to take your investments into your own hands. It opens up a small pool of investments to thousands of options. No longer are you restricted to the mutual, target date, and specialized funds or bond options. Instead, you can choose what you want beyond the pre-made funds available to you. You get access and the power to choose any stock, fund, ETF, or other unconventional assets under this plan.
Are You Eligible For a Self-Directed Account?
Your eligibility is dependant on mainly one factor. That is, your employer must be enrolled in a 401(k) option that allows for self-directed accounts. It’s not enough just to be with an investment company that allows it, but it must be allowed under your specific employer plan. I found this out when trying to get mine started. Although T. Rowe Price has self-directed options, my employer did not include them in our plan.
What Does This Mean For You?
Having access to a self-directed 401(k) plan means expanding your investment opportunities. It allows you to incorporate non-traditional investments and individual stocks into your retirement strategy. It also means taking control of your investments in a way that takes into account your investment style and goals for the future. For more information on self-directed 401(k) accounts, check out the posted video and read more.
Shatel Huntley has a Bachelor’s degree in Criminal Justice from Georgia State University. In her spare time, she works with special needs adults and travels the world. Her interests include traveling to off the beaten path destinations, shopping, couponing, and saving.