*UPDATE: Other Citi employees say employees are allowed to invest a portion their 401ks in Citi stock, but aren’t required to. We’d like to see the company actively discourage this because it is effectively condoning a dumb practice (putting both current and retirement eggs in one basket). But based on the comments here, it sounds as though our earlier source was misinformed.
EARLIER: The spouse of a Citi employee tells us that an important part of the family’s ongoing financial planning is to keep shoveling automatically distributed Citi stock out of the employee’s Citi-matched 401k plan. We find it nearly inconceivable that a company that dispenses financial advice for a living could be so stupid as to violate this most basic tenet of wise investment policy (putting its employees’ eggs all in one basket), but there you have it.
For the sake of Citi’s 350,000 employees, we certainly hope our spouse-source is mistaken. If Citi does not, in fact, typically invest a portion of employee 401ks in Citi stock, we will gladly publish a retraction.
Meanwhile, if you should happen to work for another braindead company that is betting not only your job and salary but your retirement savings on its ongoing success, please do yourself a favour and replace the company stock with a low-cost diversified index fund immediately.
See Also: Six Ways Feds Might Bail Out Citi
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