{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"What Are the Creditor Protection Rules for Roth IRAs and Roth 401(k)s?","description":"In today\u2019s episode, David McKnight breaks down the creditor protection rules for Roth IRAs and Roth 401(k)s, as well as why more and more Americans are turning to tax-free accounts to insulate themselves from creditors\u2026 and the Government itself. In theory, under Federal Law, all IRAs traditional or Roths receive a certain level of bankruptcy protection under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. However, that protection is specifically tied to bankruptcy proceedings. If you\u2019re sued in civil court, the Federal bankruptcy statute doesn\u2019t automatically apply, state law takes over\u2026 By pointing out differences between states like Texas, Arizona and Florida on one end, and California and Montana on the other, David explains that whether your Roth IRA survives a potential lawsuit intact depends largely on the state in which you reside. Roth 401(k)s play by a different set of rules, as they fall under the 1974 Employee Retirement Income Security Act (ERISA). David notes that \u201cERISA is the big Federal law that governs most employer-sponsored retirement plans, and it comes with some of the strongest creditor  protection available anywhere in the financial world.\u201d  According to David, it\u2019s not hard to see why the Federal Government is going to need huge infusions of new revenue in the very near future. Wondering how they will be raising that capital? By targeting the nearly $45 trillion in tax-deferred retirement accounts like IRAs and 401(k). In other words, while your retirement accounts may indeed be largely immune to lawsuits, they\u2019re entirely exposed to the impact of rising tax rates. David points out that contributing to 401(k)s or IRAs is like going into a business partnership with the IRS \u2013 every year, they get to vote on what percentage of your profits they get to keep. Remember: a well-planned Roth strategy doesn\u2019t just shield you from tomorrow\u2019s higher tax rates, it can also serve as a fortress protecting your wealth from outside claims.     Mentioned in this episode: David\u2019s new book, available now for pre-order: The Secret Order of Millionaires David\u2019s national bestselling book: The Guru Gap: How America\u2019s Financial Gurus Are Leading You Astray, and How to Get Back on Track Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Employee Retirement Income Security Act of 1974 (ERISA) ","author_name":"The Power Of Zero Show","author_url":"http:\/\/davidmcknight.com\/","html":"