medium · Certified Financial Planner Professional Conduct
The Mendez household is worried about potential lawsuits. Mr. Mendez has 500,000 in his employer's 401(k) plan and200,000 in a Traditional IRA rolled over from a previous employer's plan.
If he files for bankruptcy in 2026, which of these assets receives unlimited protection?
- Only the $500,000 in the 401(k) plan.
- Both the 401(k) assets and the rollover IRA assets, including their earnings.
- Neither, because assets in a retirement plan are considered part of the bankruptcy estate.
- Only the assets that were contributed to the IRA within the last 12 months.
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