I don't like my company's retirement plan sponsor. I feel their array of investment options are quite poor (poor because they don't have many options, their expense fees are high, and they don't offer low-expense index funds like vanguard). To be blunt, I feel like they are intentionally giving me poor options in order to make money off of fees. However, because my employer does a matching policy with them, so I feel like I don't have a choice.

Say I wanted to regularly direct the funds from my employer's retirement account to another 401k plan that gives me a larger array of options (i.e. maybe some sort of Fidelity IRA). Is there a way that I can do this? This is assuming there isn't a vesting period with the match and I plan to keep working with my current employer. If I was quitting or they changed providers, I would happily do a rollover, but the problem is that I don't plan to leave me employer and I want to be able to have competitive mutual fund options that charge lower fees.

  • 2
    As long as you stay at or above the threshold for the company match, you can reduce your 401(k) contribs by up to $6500/year (presuming that you're younger than age 50), and put that money in an IRA.
    – RonJohn
    Feb 14, 2023 at 3:10

2 Answers 2


Generally no, you can't do "in-service" transfers out of your 401(k), but check with your benefits department to see if your company is an exception. You might also let them know your opinion of the cost of these funds, as they may not be as financially savvy to know that their fees are unusually high. It might give them some incentive to negotiate with the provider.

I am surprised that they don't offer low-cost index funds; that's pretty common in 401(k)s in my limited experience.

Personally, I view the match as an instant 100% return that more than makes up for marginally worse choices or higher fees.

  • In the process one might check if, in fact, the 401k is subject to the various fees. What fees apply to personal accounts vs corporate sponsored accounts often differ.
    – Jon Custer
    Feb 13, 2023 at 20:36

Some companies have bad 401(k) programs, even when they have matches.

When I started with one company we were always 100% vested, and the company match was very good. The problem was that they were so small the expenses charged were high. As time went by the expenses dropped as the company grew in size. This makes sense because the 401(K) plan has to be able to charge enough to pay their expenses. The more money in the plan the lower percentage of the balance the fees have to be.

The other thing that happened as we grew, is that the number of options grew.

This is a time when you should talk to HR. They may be able to answer some questions. It may be that the person picking the options doesn't understand the options. look for opportunities to mention the shortcomings with the plan at meetings with management, or with company surveys.

Some plans allow you to keep the money in the plan, but allow you to pick individual stocks to invest with. I have no idea if the fess they charge are competitive.

To be able to move money to an IRA while still employed is an option with some plans. The goal of the 401(k) administrator is to keep the money invested in things they control to generate their fees. Check your company documents to see if this is allowed. Also understand any fees involved with this, and check to see if it impacts your company match.

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