included employer contributions are usually fully exempt.
This includes 401(k)s, 403(b)s, defined benefit plans, profit sharing plans, and SEP IRAs.
The major exception to this carve-out for younger filers is with traditional and Roth IRAs, which have an exemption limit of about $1.2M (the exact number is recalculated periodically).
This is a combined figure, not a per-account amount, and can significantly change the math on a bankruptcy filing if you’re not aware of it.
If you are considering bankruptcy, it may save you a lot of money to move retirement assets into a different account type.
If you are retired and receiving income from exempt accounts, the income itself is not exempt.
The balance in the account will be safe, but the court can determine the amount of money you need to live on, then take amounts over that to repay your creditors.
To learn more about how to protect your future with a bankruptcy, call Zelenitz, Shapiro & D’Agostino today at 718-599-1111 for a free consultation.