Self Directed Brokerage Accounts

My employees want me to set up a 401k self directed brokerage account. What are the special advantages of such plans?- Edward L. Pittman, KensingtonKS runs a confectionary shop.

A Self Directed 401k plan gives the employee a great deal of control over his investments. Each of your employees is likely to have different investment objectives. An ideal 401k plan is one where each can decide where to invest and also manage investments individually. When you offer them a self directed 401k plan that has a whole host of low cost investments, retirement planning becomes easy for them. With such a plan every employee can optimally use the 401k plan to save the maximum amount in the investments that are best suited to his needs. This is probably why your employees want you to set up a self directed 401k brokerage account in your business.

You can open such an account with firms like Charles Schwab or Fidelity using a DIY software package like Such packages allow the employee to manage and track his retirement planning account on his own. This specific 401k plan lets your employees invest in several attractive investments other than those offered directly by Schwab.

For you, the employer, a self directed 401k plan is a good money saver. This is because you can process all the data pertaining to the plan within your organization. You avoid incurring the cost of hiring a plan administrator to take care of the plan’s assets and to manage the plan.

In addition, by offering a plan that gives employees this degree of control over their retirement saving, you can improve employee loyalty. A flexible 401k plan with a good choice of investments makes your business a desirable employer. This means that this plan will help attract the best talent in the market to your business.

About Elliot Earl, Director, Pension Trade Association
Director, Pension Trade Association Founded in 1982, the Pension Trade Association [California Domestic Nonprofit Corporation #C1629080] is dedicated to helping workers save for their retirement through expanded coverage of 401k -type defined contribution pension plans.

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