What to Do if You Don’t Like Your 401k Investment Options

What to Do if You Don’t Like Your 401k Investment Options

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  1. If you’re unsatisfied with your 401k investment options, there are 5 ways to improve your outlook. Taking advantage of one or more of the following 5 options can help you save more money for retirement if your 401k’s investment choices are lackluster.

    1.    Push for 401k Plan Changes

    Who decides which 401k investment options are available to employees? Usually, the decision lies with the head of the company, the head of the human resources department, or a specially-appointed 401k plan administrator. Go to this person and ask about increasing employees’ range of 401k investments.

    If your concerns are based on the fact that your plan has high fees and/or low returns that kept former colleagues from enjoying retirement, make sure your former co-workers’ voices are heard. This could pave the way for changes, both for you and other employees.

    Congress is currently in the process of altering the 401k laws on the books because many U.S. workers have complained, and even filed lawsuits, about their respective employers’ 401k plan options and fees. Many employers have proactively started to open up new 401k investment avenues to stay ahead of Congress; your employer might be willing to do the same.

    However you decide to approach and fix your 401k concerns, be careful; you don’t want to come across as an employee who is unappreciative of his or her employer’s matching contributions, which usually range from 2%-7% of the employee’s contribution annually.

    2.    Invest in an IRA Instead of a 401k

    Depending on your income and financial circumstances, you might consider investing in an IRA instead of a 401k, although you are allowed to do both. The IRA contribution limit for 2015 is $5,500-$6,500, depending on your age. If you are convinced that investing in your company’s 401k plan is a bad idea, try instead to “max out” your IRA contribution annually.

    3.    Quit Your Job

    Are you still employed by the company that provided you with the 401k? If so, how long do you plan to stay? If you are close to retirement or unhappy with your job, take comfort in the fact that you can execute a 401k rollover the moment your employment ends. By rolling your 401k over to a self-directed IRA when you separate from the employer that started your 401k, you’ll open up a plethora of new retirement account investment options.

    4.    Ask for an In-Service 401k Rollover

    Some employers allow employees to roll their respective 401k plans away from the company even if the 401k is still active. Ask your boss, human resources representative or 401k plan  administrator if you can make an “in-service 401k rollover.” In-service 401k rollover allowances are rare, but they do exist because they allow employers to avoid paying future administrative fees and matching contributions.

    5.    Invest in a Taxable Account Instead of a 401k

    If you don’t like your 401k investment options, you might consider investing in a taxable account, such as a savings account or a certificate of deposit (CD). This strategy may not be very wise right now, however, because interest rates are near all-time lows and the threat of inflation is a major issue for many investors. Additionally, savings accounts and CDs are “insured” by the FDIC, which has admitted that it has less than 5% of the funds it needs to cover current U.S. deposits.

    If you don’t feel comfortable keeping lots of money in the bank, consider using the money to buy precious metals, real estate, or other tangible assets.


    When you retire or change jobs, you’re free to roll your 401k over to a self-directed IRA. At that point, your retirement account investment options are wide open. Until then, however, the aforementioned 5 options can help you save more money for retirement.

    If you’re ready to roll over a 401k or other employer-sponsored retirement account (e.g. 403b, TSP), get in touch with http://www.401kRollover.com or call (800) 767-1423 today for a free evaluation of your 401k 

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