Creditor protection in an R/O IRA vs 401k in Massachusetts
Hello,
I am interested in understanding if creditor protection differs for assets held in a rollover IRA vs. those in a 401k plan in the state of Massachusetts? Does a solo-401k offer a different level of protection vs. the IRA or company sponsored 401k?
Thank you in advance of your comments.
Permalink Submitted by Alan - IRA critic on Wed, 2016-07-27 20:32
MA does not provide good asset protection for retirement plans. Generally, a solo K and contributary IRA accounts are protected for 7% of the last 5 years of income in a bankruptcy filing. A rollover IRA is protected without limit in a bankruptcy filing, and a company 401k is 100% protected under ERISA without the need for a BK filing. Exceptions and exemptions may apply. Note that none of these accounts are protected against IRS liens, and marriage setttlements. Recovery of criminal damages is also possible in MA for all but ERISA plans.