"The scenario you're describing—a state-sponsored AI hack so total that multiple major financial institutions simultaneously lose customer assets with no recovery—is not a zero probability, but there isn't much you can do to guard against that."
"SIPC insurance covers up to $500,000 per brokerage account, and the FDIC covers $250,000 per depositor, per bank, per ownership category. More importantly, your assets aren't held by these institutions—they're held at them."
"A brokerage getting hacked doesn't necessarily mean your Vanguard index funds evaporate. The underlying assets are separately custodied. The way modern banking and investing is set up, you'd have to be hacked individually because someone got your passwords and accessed your individual accounts."
Concerns about AI-related financial risks are valid but often exaggerated. Major financial institutions are protected by SIPC and FDIC insurance. Assets are held separately from institutions, reducing risk. Individual account security is crucial, as hacking typically requires access to personal credentials. While extreme scenarios are possible, they are unlikely to occur without broader societal impacts. Instead of drastic measures, focus on understanding and utilizing existing protections for retirement savings.
Read at Slate Magazine
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