[avenir]

I know FR has some financial wizards of sound mind. Question:

What do us suckers in an employer-based 401k (Vanguard) do to protect our money? Mine is in low risk right now, but I don’t see any options in terms of “getting out”.

[BipolarBob]

I think 401ks may be insured. You might go to the website and see if they address this in writing. Look in the prospectus. As a last resort call them.

[FrogMom]

The company may not be able to steal the 401K, but the administration has been eyeing them to beef up Social Security.

The last proposal I read suggested taking the 401Ks, rolling the money into SS, and guaranteeing you a “robust” 3% return.

I don’t trust them, I cashed mine out, we paid off our bills and bought “commodities”.

[EVO X]

What do us suckers in an employer-based 401k (Vanguard) do to protect our money?

Past results are not a guarantee of future results. Here is what happened with a few Vanguard funds in my plan during the last crash. The money market fund survived and didn't break the buck. The S&P 500 index fund tracked the market down. The intermediate bond fund principle lost about 10% when everything was selling but rebounded nicely.

[coloradan]

My understanding is, if the brokerage house steals your positions, SIPC insurance will return them to your account, but if they lose value that value will not be. If cash is taken from your account, that cash will be replaced, but at least some 401ks (such as my own) can’t hold cash, the money must be invested in a money market fund.

But wait! Money market funds have debt paper, such a government bonds, including European government bonds. Those could lose half their value in a day in Euroland implodes, and that’s considered a safe investment! Bonus question: how much are you being paid to assume that risk? 0.01%, which come to think of it is probably less than the fees the money market fund charges. A lot less.