Ditching This Single 401(k) Investment Could Save You a Mint
A 401(k) plan is a great way to save and invest for retirement and should be part of anyone's financial plan if it's offered through an employer. However, it's not without its limitations. To maximize your 401(k), investors should consider ditching this investment option.
One of the downsides of a 401(k) plan is the limited investment options. Unlike regular brokerage accounts and IRAs, you can't purchase any stock or exchange-traded fund you want in your 401(k) plan; you're given options by your plan provider. For many 401(k) plans, these options include your company's stock, funds based on market cap, and target date funds. As you get closer to retirement, target date funds reallocate to become more conservative and focus on capital preservation instead of growth. Unfortunately, they are generally more expensive because they're actively managed.
Image source: Getty Images.
Source Fool.com
