I have my 401K in WaMu. Is that insured? What would happen if WaMu goes down?
I can't take the money without penalty for another 2 years.
Answers
379 points
dustbusterz answered one year ago …
Not certain if they are insured, but I have been reading that the F.D.I.C. is nearly bankrupt its self from Bailing out all these other failed banks, so this could present a problem for any Institution that is Insured by them. Also , even if insured, your most likely invested in common stocks through them , and common stocks will be the last ones paid (provided there is any monies left after paying out all their senior debts ,such as loans, and preferred share holders. This means more than likely, you will receive little to nothing ,should they fail.
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Oldman answered one year ago …
If the 401k funds are mostly WM stock, there is no value should the co. go under...only the WM bonds might be partially recoverable, after a Ch 11.
Try not to have a retirement plan in a company's stock, above 4% of the portfolio. If the 401k has a diversified investment policy, the market risk is not terrible, if you don't need to take a loan or withdrawal during a down phase.
