Is there a way to change the company that manages your 401K? Rather than try to move your 401k account to another company, you may want to consider moving your money around within your existing 401k, and looking at some different types of investment.
When asked this question, independent investment analyst Paul Dlouhy responded "Yes and No". The only time you can really move it or transfer it without a penalty is to do a rollover" into another account. "Basically, a 401k is a trust fund that the employer establishes with the employee" explains Dlouhy. Apart from the rollover option, the only way to switch without incurring penalties is to experience a life event - retire, turn 59 and half or leave your employer.
Dlouhy also suggests, "Rather than try to move your 401k account to another company, you may want to consider moving your money around within your existing 401k, and looking at some different types of investment." By keeping your money in your current 401k, you will avoid the penalties and taxes associated with a withdrawal or a rollover, and also perhaps increase your opportunities for profit and diversification.
If your employer doesn't offer the investment options you want, ask them to consider changing or adding more choices - most large companies have some kind of framework in place for receiving and reviewing suggestions. If you think your funds are under-performing, do the research to substantiate your theory. Find out what other similar firms in your industry provide in the way of 401k options. Consider your company's situation, too - if your company is losing money and employees are being laid off, then it may not be the best time to tackle the subject.
Even though the 401k plan is fairly simple in its basic objective, some people are still confused over the options available to them, or wary of speculative investments. If the problem is that you just don't understand your 401k or investing in general, most large employers also offer advice about investment opportunities and strategy. Dlouhy also points out that "A good 401k plan will offer several different investment options but for the duration of a 401k plan, 30 or 40 years. Stocks are usually the best all round investment offering the best return, but make sure you do your maintenance to your 401k like you would to your car so it performs at its optimum."
You may also want to try to adjust the amount of your monthly contributions if you are not happy with the account company running your 401k. Giving up more money from each paycheck can mean an increased number of investment options and perhaps a more profitable return on your investment. Most companies will allow you to adjust the amount of contributions fairly easily. And if you are not getting the benefit of your employer matching your contributions - there is little you can do about this except try to change the company policy.
To summarize - yes, you can move your money to another account, but that is not usually going to be your best option from a financial point of view. You generally cannot switch the company running your 401k account - that decision would have to be made by your employer. Keep in mind the penalties and fees associated with transferring or withdrawing funds - it may be better to try to make your existing plan work for you.
