Recently I came across another article from the Slott Report by Jim Glass that had some interesting information regarding IRAs and creditors. In the event that you were to incur a large liability, would the money in your IRA be protected from creditors? The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) protects up to $1,283,025 of IRA funds from creditors in bankruptcy. Additionally, employer sponsored SEP-IRAs and SIMPLE-IRAs are fully protected in bankruptcy, as well as other types of employer sponsored retirement plans such as 401(k)s. However, these protections do not apply if you received IRA funds as a beneficiary of an inherited IRA. To review the whole article, please follow the link above. As always, consult with a financial, tax or legal professional before making changes regarding your financial position.
Cheers!
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