What you should do to protect yourself

The market may be in for more shock as a result of Monday’s announcements on Wall Street, according to local financial adviser J.D. Miller, but the effect on people who have assets with the foundering financial companies likely will be minimal.

“I doubt anyone around here has a Lehman Brothers checking account,” Miller said. “I think if it was me, I’d get that money out of there, whether they’re under the (federally insured amount) limits or not. For the sake of peace of mind, I’d get it out of there.”

Under FDIC rules, individual account holders are protected up to $100,000, joint accounts are protected up to $200,000, and IRAs are protected up to $250,000.

People with a 401(k) managed at Merrill Lynch in which the assets are not diversified should consult a financial adviser about their investments, Miller said.

Those with a 401(k) that is diversified should not be affected while Merrill Lynch is being sold, and underlying investments should not be effected.

As for troubled insurer American International Group, there are two fallback positions for protection of people with policies at the company.

If the state insurance commissioner where AIG is based forces the company into a takeover, the company that takes it over would take over policies.

The other is that each state maintains a state guarantee fund which would protect people up to certain limits.

“I certainly wouldn’t discourage people from attempting to move things,” Miller said. “If it’s true that (AIG has) got access to an additional $20 billion in capital like I’ve been reading, that would at least buy some time.”


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