Not all 401ks are created equal.

Some are flexible, with significant investment choices (both good and bad) and a willing HR department at the ready. Others are endowed with expensive funds and restrictive policies.

But don’t sweat it. The disastrous drop in the stock market – and corresponding decline in 401k and other retirement accounts – has brought new focus to improving both options and education. But before the Feds come marching in to “fix the 401k,” you should know that there are already alternatives.

Consider retirement account outsourcing. You can outsource your fund and allocation choices to professionals; or, you can outsource the investment options to yourself; or mix up both. Here’s how:

• Eye the Prize – 401k investors should look into options such as Financial Engines, founded by academic all-star Bill Sharpe (see Sharpe Ratio, Nobel Prize). The company offers advice to investing participants for an asset-based fee. They work within your plan choices and make investment and allocation recommendations. Financial Engines works with 112 of the Fortune 500 companies and eight of the largest retirement plan administrators. Guided Choice, affiliated with economist Harry Markowitz (see Modern Portfolio Theory, Nobel Prize), offers a similar service through retirement plans.
  
• Do It Yourself – Some employers allow their employees to put money into a Self Directed Brokerage Account (SDBA) within their 401k. By opening an SDBA, the investor gets access to a broader set of investment options. The retirement plan documents, however, may limit investment choices to certain investment products, in part due to litigation concerns created by potentially poor plan participant decisions.  Increased trading and administrative charges are other potential costs to mull over.
• Hire a Pro – Either using an SDBA or just opening up your standard account to a financial advisor, you can get another set of eyes on your retirement savings. A financial advisor can pick the best options for you – in your plan or in the SDBA. Just remember, there will most likely be fees that you’d have to pay OUTSIDE of your account.

Regardless of the amount your account has declined or the amount of confusion you feel, realize that you are not alone (if you choose not to be). Make sure to contact the appropriate human resource professional in charge of retirement benefits, and discover your 401k options.