Editing 401(k) (section)

===Choosing investments===

401(k) plans are restricted to investments chosen by employers. This can prevent earners from risky choices like picking individual stocks, but also from following a favored investment strategy or asset types (such as commodities), or choosing [[socially responsible investing]]. IRA providers typically offer a far wider selection of investments.{{cn|date=May 2025}}

Conversely, 401(k) plans are sometimes criticized for putting the burden of choosing and updating investments on earners, most of whom are not experts in finance. Some earners avoid signing up for 401(k)s because of the perceived complexity. [[Target date fund]]s mitigate this complexity by automatically shifting investments from stocks to bonds based on time to planned retirement date.{{cn|date=May 2025}}