Sam Taube

Let's include a link to the mutual fund calculator in our show notes.

Guilty as charged, sure.

Hi, Smart Money Podcasters.

I worked for the same company for 25 years, and during that time, I built up a significant balance in my 401k.

After moving to a different company a few years ago, I began participating in the new company's 401k plan, but I left my sizable 401k balance with my previous employer.

Currently, I'm thinking about transferring my old 401 into a rollover IRA in order to access a broader range of investment options.

However, I'm concerned about how the protections offered by an IRA compare to those provided by a 401 .

I'm aware that assets held in a 401 are protected from bankruptcy claims and liability claims.

Despite my research, however, I haven't been able to find clear information on whether rollover IRA assets offer the same level of protection.

Although I hope to never face bankruptcy or liability issues, the substantial amount involved makes it an important consideration for me.

My primary question is whether assets in a rollover IRA receive similar protections from bankruptcy and liability claims as assets in a 401k.

Understanding these protections is crucial as I evaluate the best way to manage my retirement savings.

Thank you.

So you are correct that rollover IRAs are not a specific type of IRA.

But for the purposes of this question, it actually does matter whether an IRA was funded by contributions or whether it was funded by a rollover from a 401 .

And here's why.

401k plans generally have unlimited protection from creditors in the event of bankruptcy or some other legal proceeding.

IRAs have limited protection at the federal level up to a certain amount of money, which was $1.7 million last year.

It's adjusted yearly for inflation.

I don't think we have the 2026 number yet.