There's a New Option in Your 401(k). Read This Before You Try It.

Managed accounts are becoming an increasingly popular option for retirement savings in 401(k) plans. These accounts offer tailored investment portfolios and advice based on individual situations, but they come with higher costs compared to target-date funds. While managed accounts can help boost savings rates and prevent investors from making impulsive decisions during market downturns, research suggests that they may not be worth the extra cost for everyone. Many participants in managed accounts fail to provide the necessary personal information to customize their portfolios, resulting in portfolios that closely resemble target-date funds. The state of Alaska recently closed its managed-accounts service for public-sector employees due to concerns about performance and fees. [Extracted from the article]