3 Signs You're Ready to Graduate to a Self-Directed 401(k)
Yes or no: Have you ever chatted about your retirement savings plan at a cocktail party? If yes, you're probably among the country's elite, long-term savers. You might enjoy reading a good fund prospectus, debating appropriate asset allocations for any age, or sharing feedback and requests with your 401(k) plan administrator. It's also possible you've outgrown the limitations of your standard 401(k), and you're ready to move into a self-directed plan.
The self-directed 401(k) usually takes the form of a brokerage account inside your standard 401(k). You might see it referred to as a brokerage window or self-directed brokerage account (SDBA). If your employer offers self-directed retirement investing, you'd have access to a bigger list of mutual funds or even the full range of stocks, bonds, and exchange-traded funds. Your employer sets the rules, but the selection should be much broader than the 10 or 20 funds available in your traditional 401(k).
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