Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Rules protecting retirement accounts from lawsuit.
Old 10-29-2020, 05:50 AM   #1
Thinks s/he gets paid by the post
Join Date: Oct 2019
Posts: 2,906
Rules protecting retirement accounts from lawsuit.

The recent UIM insurance thread, that I seem to have added Umbrella policy questions to (sorry) has me wondering if or how well Retirement accounts are protected from lawsuits. I have read the articles below and it seems they do get pretty good protect, however some states protect better than others. I added an article about Florida because that's where I live. Florida is high on the protective list.
About 1/3 of our nest egg is outside of retirement accounts.

Time2 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-29-2020, 06:33 AM   #2
Thinks s/he gets paid by the post
gauss's Avatar
Join Date: Aug 2011
Posts: 3,325
FWIW - My understanding is that 401(k)'s are "protected" uniformly in all 50 states, but IRAs vary on a state by state basis.

Another potential reason not to roll over that you will likely not hear from the financial industry.

gauss is offline   Reply With Quote
Old 10-29-2020, 07:15 AM   #3
Thinks s/he gets paid by the post
Join Date: Aug 2014
Location: Chicago West Burbs
Posts: 2,634
From my understanding, ERISA accounts are fully "protected" from bankruptcy or garnishment. You can still be hit with a court award of say 1 million. You would have had to ignore the court order and not pay (forever) , or file bankruptcy.

Federally, IRA's and Roth IRAs are currently protected in bankruptcy up to $1,362,800 ( That amount is adjusted year to year. States' laws vary on these accounts.

I may be misunderstanding this. Do not use this info for your financial planning. Seek confirmation.
CRLLS is offline   Reply With Quote
Old 10-29-2020, 10:14 AM   #4
Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
My impression is that ERISA is the gold standard . Except for IRS and spouse (QDRO), 401Ks are pretty battleship- hardened in most circumstances so I am planning to leave the company plans where they are esp. since they also have low cost index funds.

From OP's 2nd link:
"Although IRAs are not ERISA-qualified, the funds are protected under a separate law—the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)—but only if you file for bankruptcy." This appears like weaker protection since you have to file for bankruptcy (unlike for 401Ks) .
It is not clear to me whether the state exemption for IRAs/Roths depends on filing for bankruptcy.

kaneohe is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Protecting Your Nest Egg from the Vultures? ShokWaveRider FIRE and Money 62 11-14-2007 12:49 PM
Protecting an eight-year-old computer? Nords Other topics 42 08-06-2006 10:34 AM
Protecting assets Umbrella ++++ wallygator69 FIRE and Money 11 04-08-2006 09:00 AM
Protecting Assets garrynky FIRE and Money 8 10-18-2005 09:44 AM
Protecting Assets? BigMoneyJim Young Dreamers 27 03-05-2005 04:04 PM

» Quick Links

All times are GMT -6. The time now is 09:36 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2023, vBulletin Solutions, Inc.