asset protection strategy

Do retirement accounts offer a layer of asset protection? If as my rental portfolio grows, would it be a good idea to funnel more money into my workplace 401K and Roth IRA account? I have heard that these type of accounts are somewhat protected. Anybody know or heard this as well?

Edited: 06/26/2010 at 04:10AM

Frank Adams

· Loveland, CO

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Icon_minipost Oct 25 '07, 07:52 PM

O. J. Simpson (double murderer) seems to have adequately protected his NFL and other retirement plans.

The very first layer of protection is insurance. Insurance companies fight really hard when they have a lot on the line. That's why we carry (IIRC) $100K/$300K on the cars and houses and a $2MM umbrella policy.

You also want to maintain a good balance between your REI and other investments. I've generally tried to keep my RE below 35%-40% of my total asset package. And just like with your mutual funds make sure that you're not too heavily into " growth" property versus " income" property.

Alway make sure you lots of ready cash available to take advantage of ever changing economic conditions. That cash needs to be in non-retirement accounts.

all cash

Edited: 06/26/2010 at 04:10AM

Account Closed

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Icon_minipost Oct 25 '07, 08:23 PM

In some ways retirement accounts are protected from creditors and many other situations. Divorce settlements normally treat a retirement account differently.

Assume a pension account is part of the strategy for protecting your assets.

John Corey

Edited: 06/26/2010 at 04:10AM

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Icon_minipost Oct 31 '07, 04:31 AM

Originally posted by "REI"

In some ways retirement accounts are protected from creditors and many other situations. Divorce settlements normally treat a retirement account differently.

Assume a pension account is part of the strategy for protecting your assets.

The exception to this is when you are using a self directed IRA (or similar source). In that case, the IRA is the damaging party and can be taken. Then they go after you and your other assets because you own and make decisions for your IRA.

Edited: 06/26/2010 at 04:12AM

Account Closed

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Icon_minipost Oct 31 '07, 06:06 PM

Good point Jeff.

John Corey

Edited: 06/26/2010 at 04:12AM

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Icon_minipost Nov 01 '07, 12:27 AM

I just thought that I'd clarify my post.

I was talking about using your IRA as the source of funds for a real estate deal.

I'm glad John figured it out but when I looked at my own post, I had to reread it to figure out what I was saying.

Edited: 06/26/2010 at 04:12AM

Malhar B.

Rehabber · New York, New York

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Icon_minipost Aug 22 '09, 02:22 PM

Just been reviewing asset protection as we develop a strategy for our business. I had a thought--wouldn't a self-directed IRA lending to an LLC assist in preventing creditors from going after the IRA in the event of a lawsuit? This is a work-around that I'm considering, but have not tried using retirement funds to fund investments yet. Any thoughts?

Edited: 06/26/2010 at 09:27AM