Americans work hard and save money in hopes of having a comfortable retirement. But as people live longer and spend more years in retirement than ever before, preparing financially can be complicated. Here's good news that may help families saving for their retirement.
For the first time in more than 25 years, Congress has raised the limit on federal deposit insurance coverage, which protects against loss if a banking institution fails. However, the higher insurance limit only applies to certain kinds of retirement accounts that people may have at banks and savings associations insured by the Federal Deposit Insurance Corporation (FDIC) and at credit unions insured by the National Credit Union Administration (NCUA).
The FDIC wants you to be clear about what has changed…and what hasn't. Here is an introduction to what you need to know about your FDIC insurance coverage.
The higher insurance coverage applies to traditional and Roth IRAs (Individual Retirement Accounts), Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plans for Employees (SIMPLE) IRAs. Also included are self-directed Keogh accounts, "457 Plan" accounts for state government employees, and employer-sponsored "defined contribution plan" accounts that are self-directed, which are primarily 401(k) accounts and include SIMPLE 401(k) accounts. In general, self-directed means that the consumer chooses how and where the money is deposited.
Under the FDIC's new rules, which took effect on April 1, 2006, all of your deposits at the same insured bank that are in this broad category of retirement accounts are added together and the total is insured up to $250,000. Your retirement accounts also are separately insured from any other deposits you may have at the same institution.
For the first time in more than 25 years, Congress has raised the limit on federal deposit insurance coverage, which protects against loss if a banking institution fails. However, the higher insurance limit only applies to certain kinds of retirement accounts that people may have at banks and savings associations insured by the Federal Deposit Insurance Corporation (FDIC) and at credit unions insured by the National Credit Union Administration (NCUA).
The FDIC wants you to be clear about what has changed…and what hasn't. Here is an introduction to what you need to know about your FDIC insurance coverage.
The higher insurance coverage applies to traditional and Roth IRAs (Individual Retirement Accounts), Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plans for Employees (SIMPLE) IRAs. Also included are self-directed Keogh accounts, "457 Plan" accounts for state government employees, and employer-sponsored "defined contribution plan" accounts that are self-directed, which are primarily 401(k) accounts and include SIMPLE 401(k) accounts. In general, self-directed means that the consumer chooses how and where the money is deposited.
Under the FDIC's new rules, which took effect on April 1, 2006, all of your deposits at the same insured bank that are in this broad category of retirement accounts are added together and the total is insured up to $250,000. Your retirement accounts also are separately insured from any other deposits you may have at the same institution.
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