3 Surprising Facts Every Investor Needs to Know About 401ks
When it comes to socking money away for retirement, a 401(k) plan isn't your only option -- but it's a worthwhile savings tool to look at. In fact, the more you learn about 401(k)s, the more benefits you might discover. Here are a few surprising aspects of 401(k)s that could sway you to start participating in one today.
When you owe money, and a creditor obtains a judgment against you in a court of law, that creditor could gain the right to go after your assets -- but not your 401(k). These plans are set up under the Employee Retirement Income Security Act (ERISA) and are protected from creditors, including bankruptcy proceedings, whereas this isn't always the case with IRAs.
That said, there is an exception. If you owe money in the form of unpaid taxes, the IRS can go after your 401(k) to be made whole. But if your creditor isn't the federal government, your 401(k) will offer a fair amount of protection.
Source Fool.com
