Dear Liz: I’m a 65-year-old retiree with a large part of my retirement savings ($800,000) in two past employer 401(k)s. I would like to roll at least one of these to an IRA but am concerned about protecting the savings from legal claims should a catastrophic event occur. Can the money be protected?
Answer: The easiest solution is to leave the money where it is. Workplace retirement plans such as 401(k)s offer more protection against creditors’ claims than IRAs if you are sued or file for bankruptcy.
That said, all traditional and Roth IRAs are protected to $1 million in a bankruptcy filing, and rollovers from employer plans into an IRA have unlimited protection in that situation.
If you’re concerned that your savings would grow beyond that protection or that you might face creditors’ claims outside a bankruptcy, you could reduce your risk by ensuring that you have adequate liability insurance.
Of course, your best bet if you’re concerned about liability is to discuss your situation with an experienced attorney.
Social poster
Downloads
- No documents for download.
