What can I invest in my 401K plan?

I just started working for a small company that offers a 401K plan. The employer uses SmithBarney as their financial advisers, and I just got a booklet of about 15 mutual funds that I can invest in.

Generally speaking, am I only allowed to invest in these MFs or can I ask the financial advisor to put my money into anything that I want?

The options that I have r pretty expensive in terms of sales loads and fees, and I'd like to invest in something better!

Thanks

You can only invest in what the company offers.

I've always suspected that with high cost funds, the managing company is assuming costs for your employer in return for putting the employees into funds they can make a nice profit on.

It's still a good deal for you though. I had a 401k with high costs (they put tax free 401ks into tax free variable annuities - doesn't make sense at all). Low returns on it, but once I left the company, I rolled it over, and its 6x my investment now.

You are stuck with the 15 investment options. Many small companies get hosed with the expensive investments.

Depending on the situation, you might want to only invest up to a company match (if any), and then consider a Roth IRA, where you can invest up to $4000 depending on your income (ie if you get above 100,000, you need to double check the limits). The Roth IRA lets you invest in pretty much anything. You pay taxes on the money going in, but when it is pulled out at retirement it is tax free (contributions + earnings).

On a 401K, you can only invest in the funds that they offer.

Most likely, you're employer will also be contributing so you're still coming out ahead. If your employer is not making any contribution to the 401K, then consider taking the money and putting it into an IRA. You'd have more funds to choose from.

But anyone that has a 401K with the employer contributing a percentage is a fool not to take it. That's like turning down free money.