Since I have retired from my company, I plan to move the majority of my retirement savings to a rollover IRA. Although I knew qualified company retirement plans (see ERISA) like mine were protected from creditors, I wasn't sure about IRAs.
The article Individual Retirement Accounts and Bankruptcy by Ellen R. Marshall in the CPA Journal shares that all retirement accounts are now afforded some protection. Previously, a qualified company retirement plan was acknowledged to be 100% protected, but it was unclear if IRAs were provided any protection. The Bankruptcy Abuse Protection, Consumer Protection Act of 2005 went into effect on October 17, 2005 and provide unlimited protection for IRA rollovers from qualified retirement plans and up to one million dollars for contributory IRAs. If IRAs are co-mingled, the protection can still be applied to the separate components.
Given these protections, I can move my company retirement accounts to a Rollover IRA and be confident that the funds are protected assets.
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This is not financial advice. Please consult a professional advisor.
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