Employer Retirement Plans

• Many employers encourage their workers to participate in 401(k) plans by offering matching contributions. If you put $10 a week into your 401k, your employer will also contribute $10 a week into your account. If you decide to roll this over into an IRA later, the employer contributions will be protected from bankruptcy courts. You can also keep any money you made in interest or through wise investments.
  
  

In Transit

• Your money is protected even if you are in the process of transferring it from one account to another. You can transfer funds from one IRA into another or from an IRA into another type of retirement account, and no one will be able to seize it. You can even keep money that you withdraw from an IRA as long as you roll it back over into another IRA within 60 days.
  
  

Inherited IRAs

• However, you won't be able to keep an IRA that you inherited. Your IRA is protected as long as it contains funds that you saved for retirement. Inherited IRAs are not considered to be retirement funds because they are "distributed to the beneficiary without regard to age or retirement status," according to CCH Aspen Publishers. An inherited IRA is not protected, even if you immediately transfer all the money from the inherited IRA into your personnel IRA.
  
  

Exemption Provision

• Your IRA is only protected up to $1 million. If you have $1.5 million in your IRA, you must surrender $500,000. However, you might be able to keep more of your money if the judge feels it's necessary. If you have a disability and require expensive medical care, the judge might believe you will need more that $1 million to get by. In this case, you would be allowed to keep more of your IRA funds.
  
  

Considerations

• Remember, your IRA is only protected in bankruptcy. You could be forced to surrender your IRA to pay "judgments awarded in other courts where state creditor protections laws will apply," states to Entrepreneur. If you are sued and forced to pay a settlement, your IRA won't be protected. Likewise if you get divorced, your former spouse might be awarded a portion of your IRA.