Protection from lawsuits6 of 8Federal law protects the money in 401(k) plans from most law suits, says Slott. But IRAs are protected by state law, "so you have to know what's protected in your state," he says.If law suits, judgments or collections are a concern, a quick phone call to your attorney should let you know if your IRA is shielded from creditors and up to what amount, he says. Related Articles:Cash out, rollover or leave 401(k)Who gets money after you die?7 steps to a Roth IRA conversionPenalty-free withdrawalsRelated Links:Target date fund pros and consUse Roth IRA as your emergency fundPitfalls of automated retirement plansSavings milestones for retirement advertisement
Federal law protects the money in 401(k) plans from most law suits, says Slott. But IRAs are protected by state law, "so you have to know what's protected in your state," he says.
If law suits, judgments or collections are a concern, a quick phone call to your attorney should let you know if your IRA is shielded from creditors and up to what amount, he says.
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