Here's the problems you have with the FDIC or SIPC. Both are poorly funded especially SIPC. SIPC covers most accounts that are held by financial institutions and not by banks. SIPC insured a lot of Lehman accounts. It will be interesting to see how much they have left after those payouts. For a retirement account you have few choices. They are:
OPTION 1: You request direct registration as a book entry at the transfer agent, naming your trust entity and your retirement account name. This creates what equates to a check requiring two signatures and thereby assures a fast settlement and payout by a bankruptcy judge.
OPTION 2: You require your trust agent to assure you that your IRA is held in a true custodial form. That means the assets of the retirement account are segregated to your IRA account name and is not part of the balance sheet of the financial agent. If those assets are in the nominee name of the Trust agent your assets are on their balance sheet and if they go under so does your account.
OPTION 3: For your IRA, go to your broker and request a stock certificates in the name of your broker, for the benefit of "Your Name". Then instruct them to hold the stock certificates in safekeeping (their safe). They will charge anywhere from $50-$100/year per certificate for this service. If you own 1000 shares of ABC company and 2000 shares of 123 company you would request 2 certificates in the amount of the shares for the stock.
Once your broker tells you it is taken care of. Call the Corporate Secretary at the company in question and confirm that your certificate numbers showed up on the company records. Also confirm the way the certificate read and the number of shares.
Please keep in mind that when you request any of these options, they will try to talk you out of it or not know what you are talking about. Don't take no for an answer.
God speed to you. The market financials are crumbling.
Interesting, I've never heard of SIPC before...thanks guys.
One thing to think about with the 401k is the mandatory withdrawal once you hit the age of 70.5 years (If I remember correctly).
Everyone's concerned about the baby boomers wiping out social security, but think about the baby boomers have have 401k's, too. And then throw in the fact that the first of the baby boomers will be arriving that the mandatory withdrawal age of 70.5 in 2016, however many will retire sooner than that.
I would speculate that will mean a higher ratio of sellers to buyers in the stock market for quite a while. The mandatory withdrawal is a monthly deal, it won't all be pulled out at once, but I'd guess that a lot of them will just withdraw their entire 401k.
I've mentioned this a while back on dailypaul, but there seemed to be a lot of denial, though I don't recall anyone providing much for refutation. I originally heard of this potential problem years ago when I was reading one of Robert Kiyosaki's books called "Prophecy" (it's about business stuff, not anything you would normally attach the word prophecy to).
Just something to think about...
A lot of boomers may not have 401Ks and if they do have a 401K it is probably invested in mutual funds and the mutual funds are invested in stocks and other Wall St. weapons of mass destruction. I not too sure about my math but if you had $100,000 in a 401K it is now worth $75,000. If you are close to retirement age or are retired that's a big chunk.
"Evil flourishes when good men do nothing."
A Republic, If You Can Keep It
Much of the run up of the stock market in the past two decades has come from Boomers increasingly investing their (now higher) "disposable" incomes into 401K's and Market-based IRA's.
Simple supply and demand... more buyers with more money chasing a set amount of stocks equals higher prices (summed up by economists with the obfuscatory phrase "at the margin") -- then "exuberance" pushes people to invest even more.
Same thing works in reverse (only faster because panic -- the evil twin of exuberance -- sets in) -- fewer buyers with less money buying an oversupply of stocks from sellers (some of whom HAVE to sell, or suffer a penalty) -- which means a definite drop in "marginal" or "current market" prices.
Only a couple ways to "avoid" (really just delay or obfuscate) that...
1) make certain the buyers have tons of money (i.e. hyper-inflate);
2) find a bunch more buyers (allow massive immigration and give them amnesty in exchange for taxation & "encouraged" investment);
3) Basically "force" the buying of stocks via taxes (i.e. "Privatized" Social Security with increased taxes invested in market);
4) Controlled (rationed) sales of retirement assets (by "nationalizing" everyone's pensions, 401K's and IRA's and "integrating" them with the newly "privatized" [so-called] Social Security).
5) watch while foreigners buy up what is left of the choice assets.
What is likely to happen? IMHO, a combination all of the above. The dollar will be inflated (at or near hyperinflation levels), immigrants will be given amnesty (and encouraged/required to "invest"); the market will be further "socialized" via a pseudo-"privatization" of Social Security (with significantly higher payroll taxes); but conversely, despite being called "privatized" accounts, the government will actually be rationing and literally controlling the amount of fund that can be withdrawn, and finally foreigners with hard assets will end up with the lions share (i.e. full controlling interest) of any real assets and virtually all of the companies.
End result, full-blown national socialism with the consent and even the DEMAND of majority of the population (who will LOVE it... for a while).
After that? Heck... disaster, but whether anything survives the disaster and what THAT looks like... ?????
Look at the information in this comment. Note that stocks, bonds, mutual funds, and money market funds are not covered by FDIC. The Securities Investor Protection Corporation, a separate institution chartered by Congress, provides protection against the loss of many types of such securities in the event of a brokerage failure.
I just read this on yahoo...
Candid photo of Bob Barr follows
Why vote for the lesser of two evils when you can go all in?
vote Satan/Paulson '08
"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."
get an ear job?...LOL
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