Rollover IRA balance over SIPC limits

[tessaduncan]

DH has rollover IRA at VG that's exceeded the $500K limit by a fair amount. Can it be split somehow into 2 separate accounts so as to have full coverage? I have heard they have 'additional' insurance through Lloyds but I'm not clear on just what that is. Am I worried about nothing? I'd call Vanguard and ask but they won't talk to me since it's DH's.

 

[2017ish]

We haven't really worried about it given the track record on the rare occasions that SIPC has been invoked. Here is a decent overview that also talks about the Lloyds coverage: Exceeding $500,000 SIPC Insurance Limit at Vanguard (or any Brokerage) — My Money Blog

Safest way would be to split the IRA between two firms (Schwab/FIDO/TDAm and Vanguard), but complicates matters for too little additional safety in my personal opinion.

 

[Sunset]

I have multiple IRA accounts at the same brokerage, won't Vanguard do the same if you are worried ?

 

[2017ish]

I have multiple IRA accounts at the same brokerage, won't Vanguard do the same if you are worried ?

Undoubtedly would be willing to let you split the account, but that wouldn't give you additional SIPC protection. Both accounts are owned by the same legal entity.

 

[tessaduncan]

DH and I (kids too) do have multiple IRA accounts at Vanguard - Roth, tIRA, inherited - but this particular account was a rollover of DH's 401k from a previous employer. I was wondering if it could be split at VG or could we transfer half to another brokerage? Should we even bother? Almost 90% of our assets are in Vanguard and while I like the ease of having everything in one place (should I get hit by a bus or something), my Daddy always said not to put all my eggs in one basket.

 

[2017ish]

I doubt that rollover IRA is going to be separate from tIRA or inherited; could all be rolled up together if held for same person. Roth, surprisingly, is treated as a different type of account. See SIPC - Investors with Multiple Accounts

Here is another good overview:
SIPC Coverage Limits with Multiple Accounts (IRA, Taxable, etc.) — Oblivious Investor

Personally, I still think it isn't worth worrying about. https://blog.wealthfront.com/false-comfort-of-sipc-insurance/

 

[tessaduncan]

Well, now there's more over the limit if ALL IRAs (except Roth) for one person are rolled together. I just assumed they were all separate. Thank you 2017ish for that info.

 

[Sunset]

DH and I (kids too) do have multiple IRA accounts at Vanguard - Roth, tIRA, inherited - but this particular account was a rollover of DH's 401k from a previous employer. I was wondering if it could be split at VG or could we transfer half to another brokerage? Should we even bother? Almost 90% of our assets are in Vanguard and while I like the ease of having everything in one place (should I get hit by a bus or something), my Daddy always said not to put all my eggs in one basket.

You can transfer to another brokerage and they will pay you to do so. I just did this for myself and DW, so we each got $600 + 2 months of free trades (which will be nice to re-adjust some holdings).

https://www.tdameritrade.com/specialoffer.page

Just open the account, it's pretty simple, and you can phone them to get help if needed, fill out the paperwork, and transfer whatever out of Vanguard you want.