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Questions About Company Bankruptcy 401k

If the company managing your 401K files for bankruptcy, are your investments protected?

I don’t mean, obviously, the companies you are invested with, I mean just the one that manages the portfolio. For example: let’s say I have $10,000 in Microsoft stock in my 401K and it is managed by Vanguard and Vanguard goes kaput! Am I out of luck?
The PBGC website says it protects defined beneift pensions. 401Ks are definded contribution plans.
It also specifically excludes 401Ks and profit sharing plans.

Industry Expert answers:

401(k)s are protected under the Pension Benefit Guaranty Corporation (PBGC). – a US Gov agency.


You are only out of luck if the stock goes BK and goes to zero.

Can anything happen to my 401k with Fidelity if my company goes bankrupt?

I am no longer employed and I am allowed to leave my 401k in with Fidelity but my old employment may go bankrupt. Will their bankruptcy affect my 401k? What if my old company get sold?

Industry Expert answers:

Call Fidelity Investments directly.
They can open an account for you and transfer the money from your 401K into one of their brokerage accounts.
Ask to transfer into a rollover IRA.
You will be able to buy stocks, no fee mutual funds.
You will also be able to buy high interest cd’s (up to 6%) with absolutely no fees whatsoever. Go to their site and check it out first.
Never leave a 401K at an old company.

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