420 North Evergreen Road
Written by: Core Financial Group
Our clients ask us, from time to time, to review their 401k to determine what investment options are the best choice for their situation.
Most employer retirement plans start with what’s called a “fund line-up.” This would be a limited number of mutual funds available for employees to choose from. In a lot of plans the primary options are target date or lifestyle funds that are built for a large group of people with the same retirement time horizon. In addition to lifestyle and target date funds the company will also provide a few funds the employees can choose from that are focused on a particular asset class, large cap value or small cap growth for instance. The employee is then forced to choose from those available options to build a portfolio that fits their time horizon and risk tolerance.
One thing we have found is that many employees are not aware that over the last several years many employers have opened the option for employees to allocate their retirement dollars to what is called a self-directed brokerage account. This is an account the employee can open within the company’s retirement plan that opens the amount of investment options for the employee. It also gives the employee the ability to have a financial professional build an investment model specific to their retirement plan goals.
We have found this to be a great addition to many employer sponsored retirement plans that a lot of employees are not aware of. If you have questions or would like to see if your employer offers this service, please reach out and we are happy to set up a time to review.