Question: I'm 60-years-old. My 401(k) balance is $500,000. Should I move it to a brokerage account if the company I work for is in serious financial trouble?

Answer: Generally speaking, says Steven Hiraga, CFP, CPFA, with Smith Bruer Advisors, an employee's 401(k) balance is not tied to the financial stability of the employer, especially if the money is invested in a diversified portfolio such as a target-date fund or target-risk model. “Money that an employee has vested in a 401(k) plan cannot be accessed by your employer's creditors,” he says.

Steven Hiraga, CFP, CPFA

Steven Hiraga, CFP, CPFA

However, there would be concern if an employee's entire retirement savings were invested in the stock of their employer that is facing serious financial trouble. “The concern, though, would be loss of value, not of an inability to access the holdings,” he notes. This is one more reason that it is a good idea to diversify.

“I would recommend speaking with the plan adviser to discuss rules of the plan regarding in-service withdrawals after age 59 ½,” says Hiraga.

Of note, the National Association of Retirement Plan Participants has this to say about 401(k) account at companies going out of business: "Your 401(k) account is not held by your employer. By federal law, all 401(k) money must be held in trust or in an insurance contract, separate from the employer’s business assets. That means your employer or the company’s creditors cannot lay claim to the money.

"As long as your 401(k) contributions have been regularly deposited in the plan by your employer, the money should be safe. By law, employers must deposit 401(k) contributions into the plan within 15 business days after the end of the month in which they withhold your contribution (7 business days for companies with fewer than 100 participants). If your employer didn’t deposit your contribution before declaring bankruptcy, you could lose that month’s contribution." Read more about what happens if your employer goes out of business

Got questions about Social Security, Medicare, retirement, taxes, estate planning, insurance, investments, or money in general? Get answers. Email Kim McSheridan assisted with this report.