The Skinny on Self Directed 401(k)s

You probably already know that saving for retirement is important. Hopefully, you also know that there are a variety of ways in which you can save for retirement. One of the most common of those ways is through a 401(k), but it’s important to understand that there are actually several different types of 401(k) plans. One of the best types, especially for people who wish to have more control over their pre-tax retirement contributions, is the self-directed 401(k).    

Invest the Way You Want

With a standard 401(k), you really aren’t responsible for managing the plan yourself, which some people like. If, however, you’d actually like to have more control and invest the money the way that you want to, then a self-directed 401(k) is the right choice for you

With this option, you can choose your own stocks, mutual funds, and bonds, or you can even choose to invest in alternate ways, such as real estate or commodities.

The thing to keep in mind, though, is if you want to be successful with a 401(k), you do need to know HOW to invest, which takes a lot of experience and knowledge. If you don’t have that, then, unfortunately, you might have a hard time investing wisely.

Not having investment experience, however, does not mean that you can’t have a self-directed 401(k). It just means that you might need a little help understanding your investment options and choosing the best ones to meet your retirement needs and goals. That’s where hiring a skilled, experienced investment adviser can really come in handy. These professionals can help you to make decisions about your self-directed 401(k) and related investments that are going to benefit you both now and in the long-run.

The bottom line is that, if you want more control than a basic 401(k) plan offers, go with a self-directed option, and seek help if you need it. If you can follow these tips, then you should have great success with saving for retirement!