What the Lehman Brothers bankruptcy filing means

Lehman Brothers announced today it's filing for Chapter 11 bankruptcy protection. Here's what that means to you.

1) Your accounts are protected

If you have a brokerage account with Lehman, you will be protected up to $500,000 by the Securities Investors Protection Corp. The Securities and Exchange Commission has strict rules about keeping the brokerage’s money separate from your investments. So even if the firm goes under, your money should still be there.
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2) Don't panic

Granted, over the last few years financials have become one of the most important drivers of the S&P 500 and by extension index funds, which can impact your 401(k). If your portfolio has taken a hit because of the Lehman news, it's not time to panic and take your money out of the market. It's too late for that. Remember that anything that brings confidence to this sector is good - but a well-performing financial sector is also critical to something more fundamental – an economic recovery.

3) Know the limits

If you're worried in general about the health of your bank, make sure your bank is FDIC-insured. As an individual, your deposits are insured up to $100,000 in an FDIC-insured bank. This includes your savings, your checking, any certificate of deposits (CDs) and money market accounts. Joint accounts can be insured up to $200,000. IRAs and Keoghs - these are retirement plans for people who are self-employed - can be insured up to $250,000.

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Posted by: CNN Personal Finance Editor, Gerri Willis
Filed under: Finance • Living • Willis