3 Asset Protection Strategies to Conserve Retirement Funds
March 23, 2021at9:30 PM
If only it were as easy as transferring part of your paycheck into savings every week to ensure a comfortable retirement. Instead, you seem to need a multi-faceted approach and a wealth of financial knowledge. Preparing for retirement requires sound investing, artful tax planning, and sensible asset protection strategies in case of bankruptcy or lawsuits.
Preparing for the unexpected is a crucial part of retirement planning. Rather than stress about the future, work with financial advisors. They’ll look at your lifestyle and finances and help you develop and implement a plan now to support your retirement dreams.
No retirement plan is complete without asset protection strategies to conserve your retirement funds.
Take advantage of qualified employer-sponsored retirement plans.
There’s federal legislation protecting funds in employer-sponsored retirement accounts from creditors in both bankruptcy and non-bankruptcy situations. When you maximize contributions to retirement accounts through your employers, you’re safeguarding your funds. You’re ensuring your savings for when you retire, regardless of the fiscal obstacles you encounter in life.
This is the top-recommended asset protection strategy by financial advisors like OWLFI. Their retirement planning team includes CPAs, attorneys, and financial advisors working together to develop holistic financial plans for clients.
Keep a separate rollover IRA for pension assets and 401(K)s.
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act expanded the protections for retirement funds from creditors, but there’s a labyrinth of provisions and clauses defining which IRA accounts benefit from the additional protection.
Rollover IRAs already allow you to keep the tax-deferred status of your pension or 401(K) accounts from an old employer. They also maintain the legal protections from creditors and lawsuits. However, adding new assets to an IRA violates those protections and makes it fair-game for creditors.
Because of that provision, it’s a good idea to keep a separate rollover IRA for funds from employer-sponsored accounts and a second IRA for individual contributions. You still get some protection from the 2005 act, but it’s capped at $1 million.
The rules regarding IRA immunity from creditor action vary significantly from state to state. Rather than muddling through the specific regulations yourself, meet with an experienced team of financial planners to develop a reliable asset protection strategy for your retirement.
Take advantage of your state’s protections, including homesteads and asset protection trusts.
One of the most significant benefits of working with a retirement planning team is the diverse backgrounds providing you with advice and guidance. Every state has different rules regarding protected assets. The retirement planning services at OWLFI include attorneys familiar with the specific regulations in your area.
Your home can have anywhere from none, to limited, to complete protection from creditors and civil lawsuits. Knowing your state’s specific protections allows you to make informed decisions regarding your assets and maybe even where you plan on retiring.
Asset protection trusts are no longer a shady endeavor for off-shore accounts. Now, several states offer trusts for purchase, and you don’t have to be a resident to benefit from them. An independent trustee runs the account - which is safe from creditors - and issues distributions at their discretion.
Don’t take it upon yourself to organize an asset protection strategy for your retirement; work with an experienced team who knows your state’s laws and can maximize your benefits.
Protect your assets for the future by meeting with the experienced team of retirement planners at OWLFI.
It’s never too early to plan for retirement. The experts at OWLFI can help you develop a strategy now that will protect your assets - and your loved ones - in the future. They take a holistic look at your lifestyle and finances and develop personalized, custom plans to support your post-retirement goals and dreams.
Reach out to the OWLFI team to learn more about their strategic retirement planning, including asset protection, maximizing your savings, and minimizing your taxes. Take charge of your retirement today.