My wife and I have 401k accounts, but they only offer mutual funds. I do not want to invest in mutual funds and pay their large fees.

  1. What are my options to invest 401k money into ETFs, bonds, and stocks?

  2. Can I ask my employer to open the 401k account so that I can invest in all of the above?

  3. Should I close my 401k account and open an individual IRA accounts to achieve #1 ? (There is no employee match in the 401k, anyway.)


The presence of the 401K option means that your ability to contribute to an IRA will be limited, it doesn't matter if you contribute to the 401K or not.

Unless your company allows you to roll over 401K money into an IRA while you are still an employee, your money in the 401K will remain there.

Many 401K programs offer not just stock mutual funds, but bond mutual funds, and international funds. Many also have target date funds. You will have to look at the paperwork for the funds to determine if any of them meet your definition of low expense. Because any money you have in those 401K funds is going to remain in the 401K, you still need to look at your options and make the best choice.

Very few companies allow employees to invest in individual stocks, but some do.

You can ask your employer to research other options for the 401K. The are contracting with a investment company to make the plan. They may be able to switch to a different package from the same company or may need to switch companies. How much it will cost them is unknown. You will have to understand when their current contract is up for renewal.

If you feel their current plan is poor, it may be making hiring new employees difficult, or ti may lead to some employees to leave in search of better options. It may also be a factor in the number of employees contributing and how much they contribute.

  • 2
    Try to get a number of employees together, write a list of exactly the investment options you would like, and then present it to HR. The more employees involved, and the more specific your recommendations, the higher the likelihood you will be listened to.
    – dg99
    Dec 18 '14 at 18:15

See if any of the funds they offer are index funds, which will generally have MUCH lower fees and which seem to perform as well as any of the actively managed funds in the same categories.

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