http://www.fpanet.org/journal/articl...p0805-art6.cfm
This is a very interesting article talking about the various levels of protection against creditors for different types of retirement plans in view of 2005 developments in a Supreme Court case and the new bankruptcy law.
Sorry I could not copy some interesting portions on this computer so I will have to paraphrase and hopefully not misinterpret:
1) Qualified plans under ERISA (e.g. 401Ks) still offer the best protection
2) Qualified plans rolled over into IRAs now offer much better protection than before but still are not as protected (against non-bankruptcy actions) as qualified plans.
The authors also point out various situations that may have uncertain outcomes until further laws are passed or court cases are decided.
My interpretation is that the best situation if you can tolerate it financially is to leave the 401K intact and not rollover into an IRA. The major disadvantage of that is that (for a married couple) the stretch IRA is at risk unless the couple plan not to meet their demise together and the survivor must remember to rollover the 401K into their own IRA and name their own named beneficiaries ASAP.
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