Unlike 401(k)s, not all IRA funds are automatically protected from creditors in bankruptcy proceedings. However, up to a certain dollar amount, most IRA funds are protected from the reach of creditors under federal law.

Every three years, the dollar amount of protection for most IRAs are updated. As of April 1, 2025, taxpayers who file for bankruptcy can shield up to $1,711,975 in IRA funds from creditors in bankruptcy. The current limit will apply up until April 1, 2028.

Only IRA contributions and earnings on those contributions are limited in their protection. Rollovers from 401(k)s and other accounts are always shielded from creditors. State laws may also offer other protections for IRA owners in bankruptcy.

Note: Inherited IRAs generally do not have any creditor protection.