457 Plan investment options.

[Lakewood90712]

Maybe a stupid question.

Can a 457 plan have a "self directed brokerage" option using individual stocks ? My 457 plan has a Schwab self directed brokerage option ,in addition to the funds from the plan sponsor .

The "self directed brokerage" option is limited to mutual funds.

The plan sponsor does not want to even discuss it. No "Yes" and no "NO", just "DUH, we never had anyone ask".

Even if poss. , it would be an uphill battle , as the sponsor seems to think it owns the participants money .

 

[kyounge1956]

Maybe a stupid question.

Can a 457 plan have a "self directed brokerage" option using individual stocks ? My 457 plan has a Schwab self directed brokerage option ,in addition to the funds from the plan sponsor .

The "self directed brokerage" option is limited to mutual funds.

The plan sponsor does not want to even discuss it. No "Yes" and no "NO", just "DUH, we never had anyone ask".

Even if poss. , it would be an uphill battle , as the sponsor seems to think it owns the participants money .

I have just been checking out the Self Directed Brokerage Option on my 457 plan (through Prudential). The pre-selected funds don't include the asset classes I want and I don't think any of them are index funds.

The self-directed brokerage option n my plan has a bunch of extra fees, and the maximum I can have in the SDBO is half of my total balance. I can't do individual stocks in my plan either. I don't know if that's just Prudential or if 457's are not allowed to offer individual stocks. I need to call the Prudential representative and find out how to get better funds added to the list of pre-selected options. I shouldn't have to pay extra to be able to put my money into index funds!

 

[Eladio]

My 457 also has a schwab PCRA (Personal Choice Retirement Account).

There are no restrictions on using it for stocks, or etf's. Only thing I can't use is options.

No extra fees either, just the cost of making trades. ($12.95).

I just allocate most of my monthly contribution to it and make a trade every month or so when the ETF's look priced right. Since I plan on buying and holding the etf's for a long time, I figure the cost of the trade is paid for with the lower etf fees over the next 15 to 20 years.

Eladio

 

[Lakewood90712]

thank's Eladio , after checking with Schwab , I can use ET funds and individual stocks.

My employers 457 plan sponsor was clueless.

With massive corporate fraud by well known large companys , it is just too risky to put money in mutual funds IMHO . Much safer to pick stocks after research . Companys who cook the books can be identified and avoided, if you throw out the usual Wall Street BS . Mutual funds just can't do that .

 

[FinanceDude]

thank's Eladio , after checking with Schwab , I can use ET funds and individual stocks.

That is good news......

My employers 457 plan sponsor was clueless.

Usually that is the case........

With massive corporate fraud by well known large companys , it is just too risky to put money in mutual funds IMHO . Much safer to pick stocks after research . Companys who cook the books can be identified and avoided, if you throw out the usual Wall Street BS . Mutual funds just can't do that .

ETFs can duplicate many sectors, and I use them all the time. I think the right mix of ETF;s, while backfiling with good stocks, you can get a well-diversified portfolio.........