Self Directed 401k Plans

Self Directed 401k Plans allow the individual employee a chance to invest in their retirement plan and have a say on how it is invested. They can be a great thing for some employees, yet a terrible thing for others.

With a traditional 401k you deposit a small percentage of your paycheck into a retirement plan and have someone else manage your account for you. You rely on these professional money managers to invest your money wisely and turn a profit.

But now there are 401k plans which allow the average employee to manage their own fund if they choose. Many of these 401k plans will also let you invest in a wide variety of securities, but not all plans do.

Some companies will let you direct your retirement account, but limit you to mutual funds. Other companies will not let you direct your own account, and for good reasons.

Not Everyone is meant to Invest Their Own Account

I have been around enough people who opened their own account to figure out that not everyone is cut out for investing.

It does take a lot of work to get the best return possible and there are a lot of emotions involved in it. That doesn’t mean that it can’t be a great choice for the right individual. Just remember when opening up your own self directed plan you are fully taking on the risk.

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