How to open a brokerage account within 401k to buy low cost ETFs?

401k optimizer
Co-Authored and Reviewed by Gagan Sandhu, MBA - The University of Chicago Booth School of Business, CEO of Xillion
Posted on . 2 min read

Open a brokerage account within 401k to buy low cost ETFs. Here’s how: 🥷

🔑 Why use Brokerage Link?

All employers limit the number and type of funds that are available in your 401k plan. Most of these plans are higher cost, and often lower performing as well, as compared to other funds available via BrokerageLink. You can also buy individual stocks in this account with your retirement funds, if you choose to do so.

Here are the steps:

1️⃣ If your employer uses Fidelity as the 401k or 403b provider, you can expand the investment options for your retirement funds greatly by opening a BrokerageLink account within your 401k or 403b plan.

2️⃣ The most straightforward way is to call Fidelity and request it via phone.

3️⃣ Once the account is set up, you can sell some of the high cost funds in your 401k and move that money to BrokerageLink.

4️⃣ Buy low cost funds (FXAIX etc) in this account. You can also buy low cost ETFs such as SPY, VOO.

5️⃣ If you have been thinking of buying a stock, but didn’t have the money, well, now you do. You can buy individual stocks in the BrokerageLink account as well.

6️⃣ To get more ideas on what funds or stocks to buy, check out Xillion Invest

🙋‍♂️ What’s the catch?

👩‍💻 You will have to keep an eye on this account and balance it from time to time. You might also have to move money from regular 401k to this account periodically.

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