Please ensure Javascript is enabled for purposes of website accessibility

Will All-ETF 401(k)s Change Your Retirement Forever?

By Dan Caplinger - Feb 9, 2014 at 3:07PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Schwab is introducing a 401(k) vehicle with ETF options for workers. Will employers jump on the bandwagon?

Retirement investing is a key to your financial prosperity, and 401(k) plans can help you realize your retirement dreams. But many complain about the lack of investment options in some 401(k) plans. Now, Schwab (SCHW -1.24%) hopes to change that with an all-ETF 401(k) plan for employers.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, explains the program and how it will offer ETFs not just from Schwab but also other providers, including BlackRock (BLK 0.05%), State Street (STT -0.51%), and Vanguard. Lower fees could be a huge boon for workers, given that high-priced mutual funds often find their way into 401(k) plan investment menus. But Dan points out that it's really up to employers to decide whether an all-ETF 401(k) plan makes sense for them, and past efforts to introduce more low-cost index mutual funds have had only mixed success. Dan concludes that it's important to look at your own specific plan to make the most of whatever it offers you.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends BlackRock. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BlackRock, Inc. Stock Quote
BlackRock, Inc.
BLK
$696.27 (0.05%) $0.34
The Charles Schwab Corporation Stock Quote
The Charles Schwab Corporation
SCHW
$68.45 (-1.24%) $0.86
State Street Corporation Stock Quote
State Street Corporation
STT
$70.30 (-0.51%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.