401(k) investment and losses

Question

If banks are certified and backed by the government, then why during financial crisis do people lose out on their retirement investments?

In: 0

Answer 1

401Ks are not the types of investments certified by the government – you are thinking about standard checking and savings accounts. While they may be _run_ by banks (or other financial management companies) they are really investment accounts at their core. 401ks invest in various stocks and bonds to grow your money, and those investments are not protected from losses.