September 23, 2008

My Federal Retirement has been receiving many questions from readers regarding the safety of their retirement money in light of the recent troubles in the U.S. financial markets.

Below are some resources that will help answer some of your questions.

Are the Thrift Savings Plan assets safe if the company contracted to manage them goes bankrupt?

GovExec.com covered this issue in a recent article here: http://www.myfederalretirement.com/snip/106.htm 

Another article to read is:  "As Wall Street scrambles, TSP plans for upgrades and emergencies" found here: http://www.myfederalretirement.com/snip/107.htm

Is my Thrift Savings Plan (TSP) account FDIC insured? 

No.  The Federal Deposit Insurance Corporation (FDIC) insurance protects you against the loss of your deposits in an FDIC-insured bank or savings association.  FDIC insurance applies to traditional types of bank accounts such as checking, savings, certificates of deposit, and IRA retirement accounts.  It does not cover mutual funds, annuities, life insurance policies, or stocks even if you purchase these products from an insured bank.  Similarly, it does not protect investment accounts such as private sector 401(k) plans or the Thrift Savings Plan.

How can I find out if my bank accounts are covered by FDIC insurance?

The FDIC has recently launched a website with an easy-to-use online questionnaire that will help you determine if the money you have in deposit accounts at FDIC-insured banks is fully protected.  To access it go here:  http://www.myfdicinsurance.gov/