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Are Retirement Accounts Insured??
Old 02-11-2008, 01:35 PM   #1
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Are Retirement Accounts Insured??

Hey Guys,
I was wondering if somebody would help me out with this. I wanted to know if retirement accounts, specifically, 401k accounts, were insured up to a certain amount.
I ask this just out of curiousity, given what happened with enron. Thanks in advance
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Old 02-11-2008, 01:45 PM   #2
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Our accounts are not. They are through Fidelity and Vanguard. So if the mutual funds and bonds go to zero then our accounts goto zero. The chances of that happening are slim.

Anytime you deal with individual stocks in the case of Enron you are taking a big risk. All the eggs in one basket is not a very good idea.
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Old 02-11-2008, 01:54 PM   #3
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On the off cance you are talking about what happens in the event of employer bankruptcy, 401k account assets are legally segregated and should be protected through the BK process. What could get hung up is any contributions you are owed that were not yet deposited into the account, but you would be pretty far ahead in line at the BK court.
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Old 02-11-2008, 07:07 PM   #4
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Thanks for your responses, i asked because i wanted to know if my 401k with my employer was insured or not. i was reading something FDIC.org, but i just couldn't comprehend it.
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Old 02-11-2008, 07:41 PM   #5
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Originally Posted by eddieb View Post
Thanks for your responses, i asked because i wanted to know if my 401k with my employer was insured or not. i was reading something FDIC.org, but i just couldn't comprehend it.
FDIC insurance is only for checking accounts, savings accounts and certificates of deposit (CDs) up to $100K. The Securities Investor Protection Corporation (SIPC) covers brokerage/investment account up to $500K.
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Old 02-11-2008, 07:52 PM   #6
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Don't confuse what happened at Enron with a 401k plan defaulting. The Enron issue was employees investing only in Enron stock and when Enron stock fell to near zero, so did the value of their accounts. I don't know of any insurance that insures you against your investment choice losing value.

Try to keep separate the concepts of the plan defaulting and the investments inside your account falling in value.
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Old 02-14-2008, 11:53 AM   #7
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Hey Guys,
I was wondering if somebody would help me out with this. I wanted to know if retirement accounts, specifically, 401k accounts, were insured up to a certain amount.
I ask this just out of curiousity, given what happened with enron. Thanks in advance
No.
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