COVID 19 & Retirement Planning

COVID 19 can put your Retirement Account at Serious Risk

“Ours is a culture where we wear our ability to get by on very little sleep as a kind of badge of honor that symbolizes work ethic; or toughness, or some other virtue—but really, it’s a total profound failure of priorities and self- respect.”

Your qualified retirement account is the one asset that you and many have turned to in troubled times.  Whether your qualified plan is “employer sponsored” or an IRA, it makes no difference.

Business closures are at an all time high as are creditor lawsuits and bankruptcies.  It is of utmost importance for all advisors to know which accounts can be protected in bankruptcy and non-bankruptcy suits. 

It should be noted that protection levels vary by the State and you should be keenly aware of your States laws and guidelines.  Your qualified funds may be what you need if times continue to worsen.

Most employer sponsored programs provide for creditor protection at the Federal level.  These “ERISA” plans provide the broadest protections against bankruptcy and non-bankruptcy matters. 

Single person 401K plans don’t fall under ERISA, thus are NOT protected from non -bankruptcy matters. 

Roth IRA’s and traditional IRA’s are protected from bankruptcy under Federal Law up to only $1,362,800.

In 2014 there was a case; Clark vs. Rameker, whereby the US Supreme Court said that “inherited IRA’s, are not protected in bankruptcy under Federal Law”.

Given the current financial situation, we strongly recommend that a full, holistic review is of great importance.  Knowing what you have and your options under different scenarios is critical.

Please reach out for a confidential conference.  Thank you for your support and loyalty.

Jeffrey S. Adler, CLU