401K replacement

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nydoc
Posts: 149
Joined: Mon Jul 22, 2019 5:57 pm

401K replacement

Post by nydoc »

Hi,
My current 401K options are all horrible with minimum ER of 1.5%. We do not get any match. How do we replace 401K using my taxable account? By the end of the year I may join another part time job with good 401K access.
Thanks.
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whodidntante
Posts: 9115
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: 401K replacement

Post by whodidntante »

Buy equity index ETFs like ITOT and IXUS in a taxable brokerage account. But if you're leaving soon, just eat the fee for a few months and then roll it over to an IRA or a better 401k.
lakpr
Posts: 6056
Joined: Fri Mar 18, 2011 9:59 am

Re: 401K replacement

Post by lakpr »

1.5% expense ratio is right at the border where investing in either the taxable account or a tax-deferred are more or less equivalent. However, judging by your screen handle, you may be in the 32% tax bracket or higher ... IN THAT CASE, perhaps contributing to the 401k match would still make sense. Is there a match in the plan? Contribute up to the match and look for taxable investments.

There might also be a Brokerage Link option in your plan, and if you have access to that, you can buy the entire universe of funds.
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