- Traditional IRAs
- Roth IRAs
- SEP IRAs
- Simple IRAs
- 403(b) Plans
- Thrift Savings Plan
- Education Savings
Bankruptcy Protection for IRAs
Last Updated November 4, 2015
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) included a provision that protect IRAs from bankruptcy. Under BAPCPA, this protection was capped at $1,000,000 subject to increases every three years based on the Consumer Price Index (CPI). . Effective April 1, 2013, the limit is $1,245,475 (increased from $1,171,650).
SEP IRA contributions, SIMPLE IRA contributions and amounts rolled over from qualified plans, 403(b) plans and governmental 457(b) plans are not subject to this limit ( no cap for bankruptcy protection).).
Protection in other cases (other than bankruptcy) for IRAs is determined by state law.
Note: Generally, for ERISA qualified plans, assets are fully protected from bankruptcy and all other claims. Exceptions apply to claims under a qualified domestic relations order (QDRO) and IRS levy (assets can be claimed under these exceptions).
This is a very high level overview.
Individuals should consult with a bankruptcy planning attorney for assistance with determining the protection that applies to their retirement savings .
Tip by Denise Appleby