IRA’s, 401k’s, Annuities, other Retirement Plans and Pensions
THESE ARE PROTECTED ASSETS – PROTECT THEM
Many of my clients have earned retirement pensions through their employment or other efforts. It could be an IRA, a 401k, a 403b, a “defined benefit” plan, or some other pension plan that you have earned.
Some clients are tempted to use these funds to pay off debts.
We recommend that you do not use or borrow against any 401k or other pension plan to pay debts.
You should almost never use pension funds toward debts. The main reason is that these assets are protected, with very few exceptions. Your pension plan cannot be taken from you by a creditor, in a bankruptcy case.
Most 401k’s and pension plans are too small anyway, and you need them for when you retire. If you take them out now you are seriously damaging your ability to provide for your needs after you retire.
We recommend you consult with us to determine if your pension plan is protected, and what options you have to deal with your debts, including your bankruptcy options.
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