Combining IRAs risks SIPIC limits
Hi Terry. You recommended combining old 401Ks and IRAs into one IRA. I’ve read that one should not have more than $500,000 with any brokerage company. Is this really something I need to be concerned about? Thanks.
Terry Says
The government insurance program, SIPC (Securities Investor Protection Corporation) protects accounts up to $500,000 in case of fraud (not investment losses!). I always recommend the larger firms, such as Fidelity, Vanguard, T. Rowe Price, Charles Schwab.
I don’t think there is any risk there. If one of them were to fail, even SIPC could not access enough money from the government to make investors whole!
That colummd was directed at people who have several old and smaller IRAs and40l(k)s from previous employers. But if it makes you feel better, choose two custodians. Just make sure you know where all your money is so you can make the correct asset allocation — and take the correct amount of RMDs when the time comes.
