When you open a retirement account, you get a tax shelter that allows you to grow your retirement savings without paying tax on income as the product in the account. However, retirement accounts can also provide some protection against creditors. Understand the level of asset protection that your retirement account gives you can assist you decide where you want to keep the majority of your retirement savings

401k Plans: 401k is a retirement plan that are detained with your employer. These pension plans sponsored by employers allow you to defer a portion of your salary to the retirement account. 401k plans are cosseted under the Employee Retirement Income Security Act. Creditors cannot take the money from your 401k plan.

IRA: IRA is protected by preventing abuse of the Bankruptcy and Consumer Protection Act against the bankruptcy proceedings. However, IRAs are not protected to the same extent that the plans are 401k.

Limitation: asset protection help you restricted your retirement account in one respect. You are not exempt from collection actions by the IRS, regardless of the retirement account involved. The IRS can collect back taxes that you need from your retirement account