Who makes investment decisions in self-directed retirement plans?

In self-directed retirement plans, individuals are responsible for making their own investment decisions. This autonomy allows account holders to tailor their investment choices based on personal goals, risk tolerance, and preferences, rather than relying on the guidance of financial advisors, plan administrators, or investment committees.

This type of plan empowers individuals to actively participate in managing their retirement savings, enabling them to select from a range of investment options, such as mutual funds, stocks, bonds, or other securities. The flexibility of self-directed plans can be particularly advantageous for those who are knowledgeable about investing or those who wish to take a more hands-on approach to their retirement planning.

In contrast, financial advisors typically provide advice and guidance rather than making direct decisions in self-directed plans, while plan administrators oversee the management and administration of the plan but do not engage in investment decision-making. Similarly, investment committees often operate within a framework of employer-sponsored plans, which differ from the individual control present in self-directed accounts.