What 401k Investment Options Are Available?
The options to investment in a 401k account are rather extensive. You can invest in most areas that a standard investor would consider. The placement of your retirement funds is dependent upon your comfort and risk level, and the types of investment that you would like to pursue.
One of the most common places that individuals invest their 401k funds is in mutual funds. A mutual fund provides a good balance of market participation, diversification, and risk management. As such, mutual funds are a popular target for many retirement accounts.
Stocks are another frequently used option in employer sponsored retirement programs. Stocks can come in the form of publicly traded stock or private corporate stock. There are few restrictions in the area of stock investment, but be sure to check with your plan supervisor for any specific rules.
Bonds are yet another investment vehicle that may be used in a 401k account. Most types of bonds are open to investment. Municipal bonds as well as corporate and other bonds are frequently used inside of a 401k account.
Money market accounts are also frequently used in 401k plans. Transfers inside of the account from another investment vehicle to a money market account have been known to cause difficulties. You need to be aware of equity wash rules in your plan.
Though this is by no means a comprehensive list of 401k investment options, it should be enough to get your off and running. Be sure to check with your individual plan to determine the real restrictions and investment guidelines. Each plan has specific rules that relate only to that particular plan. Your plan administrator should be able to clarify any questions that you have regarding your 401k plan. They can also be a good resource for your 401k rollover needs.