Another 401K Q: self management?

[Corporate Thug]

So my roommy manages his own 401k and he insists that's the way to go...he claims to get much better returns this way. I'm a casual trader. I don't think I have the knowledge to self manage. Does anyone else self manage? Alternatively, what's a good 401k company?

 

[Zebo]

I can't with mine. You have 12 funds to choose from and that's it.

I do my own IRA though. I assume were talking about just buying and selling individual securities in your account right when you say self manage?

And yes I outperform that lousy mutual fund. I turn on CNBC and whatever they are pimping I buy if it sounds reasonable. Also I go with hunches. Like I think Euro is going to crash so I bought some EUO yesterday.

 

[SSSnail]

You may not be aware of the option, but some companies have the Personal Choice Retirement Account (or PCRA), which works in the same way as your 401K, but let you manage funds yourself. Everything within the PCRA account works like a brokerage account, except for the tax and withdrawal portions.

Once you have your funds in the PCRA account, you can trade securities, any securities just like a brokerage account; your gains would not be taxed and you cannot withdraw without penalties, just like a 401K.

Since this is very risky, that's why the option is not mentioned or offered to most people. I urge you to speak to a financial adviser prior to making any changes or attempting to manage your 401K yourself.

Cheers,

 

[kranky]

You don't get to pick the 401k company. Your employer does. And if they do offer a self-directed option, don't be surprised if it has hefty fees. Our plan is overall very good, but the self-directed plan costs $100 a year plus $39 commissions for anything other than no transaction fee funds.

I don't use it because I don't want to pay the fees. I can do my other investing with Vanguard.

 

[DaveSimmons]

> .he claims to get much better returns this way.

Most people who claim that are wrong in the long term. He probably also posts about his supermodel girlfriend in ATOT.

Even if you had the choice, you'd almost certainly do better if you only used the option to buy a good index fund or two from Vanguard.

 

[Pliablemoose]

I rolled over my IRA's into a self directed IRA through a broker, and have had really good results. I would NEVER recommend it to anyone though, it's too risky.

 

[Bignate603]

So my roommy manages his own 401k and he insists that's the way to go...he claims to get much better returns this way. I'm a casual trader. I don't think I have the knowledge to self manage. Does anyone else self manage? Alternatively, what's a good 401k company?

A quick rule of thumb, if the returns are larger the risk will be greater. How much risk can you tolerate?