With the stock market in the doldrums, and no end in sight, it’s more important than usual for you to monitor your retirement accounts and make choices that maximize your in-plan opportunities for asset growth. Here are some ideas to help you:

Rollover To A Better Plan

Analysts who look at the landscape of 401(k) plans often point to widespread plan deficiencies, including:

- Only a couple of dozen investment choices within the plan, on average
- Redundancies in the stock and bond funds available within the plan
- Few or no opportunities to invest in certain asset classes, such as small-company stocks, international stocks, real estate, commodities and even Treasury Inflation-Protected Securities.

In addition, many 401(k) plans don’t offer the top-performing fund in each asset class. Instead, they tend to offer several funds from one fund management company — which is easier for the plan administrator, but not always advantageous for plan members.

Worst of all, many 401(k) plans charge extraordinarily high fees, including both individual fund charges and overall plan administrative expenses. With the S&P 500 returning only 2.6% per year, on average since the year 2000, 401(k) charges of 0.7% per year, on average, make it more difficult for you to grow your retirement funds.

Fortunately, you don’t have to sit still for all these problems.

Your Options

Under IRS regulations, 401(k) plan members who are older than 59 1/2 may roll over their 401(k) funds to another plan, without penalty or tax. This allows you to transfer your retirement funds to a plan administrator of your own choosing, such as Vanguard, Fidelity, and Charles Schwab. All of these, and others, let you put your retirement money into a broad range of stocks, bonds, and other investments, as well as the usual mutual fund families.

If you’re not yet 59 1/2, your 401(k) plan may still allow you to legally pull your employer’s matching funds out of your 401(k) plan and roll them over into a different plan of your own choosing. Also, a growing number of 401(k) plans offer a “window” through which you can access brokerages that can help you invest your retirement funds in a broader range of investments than is available within the plan itself.

View Your 401(k) As Only One Piece Of Your Investment Portfolio

Too many investors thinks their 401(k) is the centerpiece of their retirement fund. It doesn’t have to be. There are good reasons to use other money, including taxable savings, for retirement-oriented investments. By thinking more broadly about your investment plan, you can diversify your overall portfolio with assets that simply aren’t available — real estate, commodities, and so forth — within your 401(k) plan.

Look For Special Situations

A large number of 401(k) plans now include opportunities to invest in “target-date funds.” These are specially designed mutual funds that gradually shift their underlying portfolios from more aggressive to more conservative profiles over the years when they hold your money. What’s extra good about these special mutual funds is that they will often invest in assets — such as Treasury Inflation-Protected Securities (TIPS) — that you can’t otherwise buy within your 401(k) plan.

Minimize Fund Expenses and Fees

Individually-stated sales costs, fees, and administrative charges seem relatively low. But like compound interest, they quickly add up over the years. For example, over a 20 year period, an extra 1% in annual fees can diminish your earnings by as much as $6,000 for every $10,000 you have invested.

This might be acceptable if the more expensive funds outperformed the less expensive funds. But studies show there is little if any correlation between higher fees charged by a fund and the fund’s overall investment returns. If you’re generally not getting any extra value from the higher-fee funds, why pay the higher charges? In fact, many investment counselors argue that Index funds, often charging the lowest fees, provide some of the best returns over long period of time.

Ask For Better Options

There’s no short-term payoff from complaining about the limitations of your 401(k) plan. But there may be a  long-term one. The industry is currently undergoing a trend in which plan administrators are making improvements and offering more options to members. If you make known the problems you perceive in your 401(k), you lend a little more weight to the need to tweak your 401(k) plan so it includes the investment options you feel it is missing.