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Subject:  Re: how secure is the money in a 401k? Date:  6/3/2013  2:06 PM
Author:  ems79 Number:  25040 of 26309

Some interesting points, some of which I was thinking of, and others I was not.

1) Employer
2) 401K company (e.g. Fidelity)
3) Mutual Fund (e.g. Fidelity Funds)
4) Individual Stocks (e.g. Apple, Microsoft, etc)

I assume the above is roughly the chain involved in a 401K?

I don't trust my employer very much... I hope I'll receive a paycheck each pay period, but they perform layoffs each quarter and their most recent precedent has been to notify on payday that this check (which is payment for the last 2 weeks of work) is your last, you will receive no severance, your medical/dental benefits are done as of midnight unless you COBRA, you will receive a check for your saved vacation pay via US Mail within a month, have a nice life.

My original question was regarding #2, the entity that holds the stocks/mutual funds... in essence my question was, is there a government backed insurance that will make good on any securities they are holding in my account. It sounds like there is some sort of a mix of government and private insurances. To be honest, I don't know how much I trust private insurance to pay in the situation of major banking failure because the insurers may be sunk as well. The US Government (such as it is) the only one I truly trust, and mostly because they can print/borrow additional money on demand.

Regarding #3, I had thought about this aspect as well, but decided I don't know enough about the mechanics/pricing of Mutual Funds to ask a relevant question.

Over all in the event of major war, epic disaster, etc, I'm assuming most everyone is screwed and then Bullets, Beans & Band-aids are the true currencies for a while at least...

So my concern was mostly regarding scandal and internal screw ups at the brokerage that holds my accounts.
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