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Do Your Friends and Family Have a Better 401(k) Plan?

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I was talking to a prospective client last week who wants help managing his 401(k). He is one of several doctors in a large practice in the Midwest, where he’s finally been promoted to a senior position that dictates how the practice runs its 401(k) plan. He persuaded the group to change the 401(k) to offer a self-direct option. It’s the only way to go.

With a self-direct option, partners are able to use any firm they like to manage their money. They can work with one that invests in dividend-paying stocks, gold, foreign currencies, you name it. He said that in the past, this was not possible. Now it is.

The practice was stuck with an archaic plan created years ago. A couple times a year, some young buck fresh out of college would run through a slide show with the plan’s mutual fund offerings. That was the extent of the service from the managing firm. For those of you stuck in a plan like this, you know the investment options can be limited and expensive.

The prospect and I had a nice talk. He’s in a position of wealth and at a point in his career where he needs to achieve some growth in his portfolio, but can’t afford to lose like so many did in 2008. If you find you’re stuck in an outdated 401(k) plan, ask for a self-direct option. If you’re a partner or manager in the right position, you should make this option available to your colleagues. There’s no need to stay in a plan that isn’t meeting your needs. You deserve better.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.

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