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Stocks and your 401(k) may surge now that Fed rate hikes seem to be over, history shows
(www.usatoday.com)
this post was submitted on 19 Nov 2023
133 points (94.6% liked)
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Okay... But the 401k holders aren't being cheated in this instance. They bought an asset that can increase or decrease. It increased for a long time. Then decreased. Then increased again FAR beyond where it was in 2008 just 6 years later. Most investors kept their money in and are doing just fine.
401ks are insured against losing the assets, e.g you own 500 of a particular option, you will always own those 500 unless you sell or that particular asset goes belly up, which is quite rare.
Pensions are a different beast. Closer to the pyramid scheme referenced earlier, and were generally dissolved over the last 40 years by the companies that promised them.
No, no, I get all that. I'm just trying to understand what is meant by 401k being insured against losses...I didn't think that was a thing. I thought any investment whether my personal stocks, 401k, or Roth IRA were all subject to "could disappear overnight kthxbye".
It depends on the assets in your account, but if it's not something covered by the FDIC, chances are it has coverage from the SEC, FINRA, ERISA, others, or several of these.
https://www.aarp.org/retirement/planning-for-retirement/info-2023/safety-net-protections-for-account-assets.html
You're the real MVP. Thank you.