Posted by: Lauren Young on January 26, 2007
If you haven’t checked out the new issue yet, make sure you look at our retirement coverage. Yours truly wrote a story about self-directed brokerage accounts within 401(k) plans. I spoke to several people who told me that they will be a key component in the 401(k) of the future.
Can you imagine a retirement plan where your core options are lifecycle, or target funds, and then there’s an SDA for the do-it-yourself investor? That’s coming, says Robert Jesch, a direction in the retirement group at Charles Schwab. “There’s no denying plan sponsors are simplifying at the core,” he says. “I see more of them adding a brokerage window for people who want to manage their own investments.”
Kay Conheady, a financial adviser at Apropos Financial Planning in Rush, NY, has witnessed the trend at several companies, including Eastman Kodak, where her partner is an employee. “Companies are replacing traditional choices with these new target retirement funds, and then opening brokerage portals for employees who want more choice and flexiblity,” she says.
If you know of any other companies who are following this next-generation 401(k) model, please let me know!