Question re AIG employees. I'm clueless.

[monmouth]

I have a friend with a 401K with AIG. He works for them and has been with them for years, he's upper level management and have not heard from him since this all came down. I don't dare call, I don't want to intrude and this is probably awful for he and his wife. Would his 401K and any other retirement plans through AIG be affected? He's a real company guy, etc. Wouldn't be disloyal as to pull his 401K out before this plunge.

[Tarheel_Dem]

1. My 401k is also invested with AIG. I can tell you that there were a lot

of jittery people around the office for a few days. There were emails flying back forth between H.R. & Management because people were requesting immediate withdrawal. I'll admit, I haven't read all the emails, but my boss warned me to stay calm. I'm conflicted about this, because I have a personal stake in it, but I certainly hope the CEO's don't walk away with any "golden" parachutes.

[monmouth]

2. I'll pray for you, this is so serious...n/t

[hfojvt]

3. I can tell you about my 401K with Citi

I used to work for "the bank" and had a small 401K there. However, the fund manager was Smith-Barney and I actually managed the funds - decided which funds to invest in. I only put about 10% in Citibank stock. So if they went broke I would not be out that much in 401K value. If, OTOH, Smith-Barney went broke, that should not affect my 401K either, unless they were illegally borrowing from the funds they were managing. The value of my 401K portfolio is determined by the value of the mutual funds it's invested in, which is, in turn determined by the value of the stocks which that mutual fund is invested in. Smith-Barney was a broker to my 401K, not a bank.

The problem with Enron, for example, was that people working there had the bulk, if not the entirety, of their 401K accounts invested in Enron stock. It's very risky investing to not have a diversified portfolio. If Enron employees had put 25% or less in Enron stock, then the bulk of their 401K should have survived the crash of Enron.

[monmouth]

4. Ah, great explanation, I'm not sure how that worked for my pal

but can only hope AIG was invested safely. Many thanks.