Should You Keep $500K Retirement Money at One Investment Company?

When you have $500,000 in retirement savings, should you keep it all at one investment company? This is a common worry for many retirees.

A 68-year-old investor is concerned about moving their 403(b) (a retirement savings plan for certain employees) to Vanguard, where they already have money. They're worried because this would put them over the $500,000 SIPC protection limit.

What is SIPC protection? The Securities Investor Protection Corporation (SIPC) is like insurance for your investments. If your brokerage firm (the company that holds your investments) goes out of business, SIPC protects: • Up to $500,000 total per customer • Including up to $250,000 in cash • This covers stocks, bonds, and mutual funds

The good news: Major firms like Vanguard and Fidelity are extremely stable and unlikely to fail. Many also offer additional insurance beyond SIPC limits. Plus, SIPC protection is per customer per firm - so if you're married, you and your spouse each get $500,000 coverage.

What should you do? For amounts over $500,000, consider: • Splitting money between two reputable firms (like Vanguard and Fidelity) • Checking if your broker offers extra insurance coverage • Remember that SIPC doesn't protect against market losses - only broker failure

The convenience of having everything in one place is valuable, but spreading large amounts across two firms can provide extra peace of mind without much added complexity.

This is an AI-generated summary. Read the original article at: https://www.marketwatch.com/story/im-68-is-it-wise-to-invest-my-500-000-retirement-savings-with-a-single-investment-firm-e14e81e9?mod=mw_rss_topstories