When it comes to filing for bankruptcy later in life, you likely have concerns about how it will impact your financial future as you near retirement. But letting fear stop you from regaining control will only hold you back longer. If you have questions about retirement and bankruptcy, The Jones Law Firm has the answers.
Retirement Savings and Bankruptcy
Under federal bankruptcy law, your retirement savings are protected up to nearly $1 million dollars. However, that savings must be part of a retirement plan like an IRA, pension, etc. Under Ohio bankruptcy law, almost all retirement savings are exempt from bankruptcy. For example:
- 401K Accounts: Considered the most common type of retirement accounts, your 401K accounts are covered under the Internal Revenue Code. This means that your savings should be completely untouched during the bankruptcy.
- IRA: An alternative to the 401K is the IRA. There are two types of IRAs including a Traditional IRA (pre-tax earnings) and Roth IRA (post-tax earnings). Under federal code, Traditional and Roth IRAs are each protected up to $1,283,025.
- Pensions: To be exempt, your pension must be a 401, 403, or 408 plan, or fall under the Employment Retirement Income Security Act of 1974.
- Social Security: Your Social Security payments must be completely identifiable from the rest of your finances to be exempt from bankruptcy.
If you have these accounts, you likely will still want to check with your accountant and bankruptcy attorney to ensure that the way these accounts are held is within the protections of bankruptcy exemptions.
How can I save for retirement after filing for bankruptcy?
Once you’ve achieved discharge on your bankruptcy, you can begin to save for the future. While you may not be in a position to make risky investments, you can save in other ways.
- Save Raises
- Prioritize Paying Off Debts
- Look For Ways To Increase Income
We know that saving after bankruptcy is easier said than done--but it is possible. Managing your debts and spending once you have been discharged from bankruptcy is the first step in regaining control, and rebuilding your credit.
Bankruptcy and Retirement with The Jones Law Firm
Let The Jones Law Firm help you in your bankruptcy process; we can take a look at your debts and assets and help determine if Chapter 7 or Chapter 13 bankruptcy is right for you. If you live in Columbus
, Ohio, allow Attorney Michael Ryan Jones to help you kick-start your financial future. Contact