IRA Protection from Creditors by State

IRA creditor protection varies dramatically across the United States. Some states protect IRAs fully and without dollar limits. Others cap the exemption at specific dollar amounts, limit protection to funds reasonably necessary for the debtor’s support, or exclude certain IRA types entirely. The differences matter for anyone with substantial retirement savings, especially people considering a move between states or holding IRAs in multiple jurisdictions.

Federal bankruptcy law provides a separate IRA exemption capped at approximately $1.7 million for the 2025 to 2028 period. States that have opted out of federal bankruptcy exemptions require debtors to use state exemptions instead. Florida is among the states that have opted out, but its unlimited state exemption is more generous than the federal cap for IRA owners with large account balances.

Full IRA Protection States

Most states provide full creditor protection for both traditional and Roth IRAs without a dollar limit. States in this category include Connecticut, Illinois, Indiana, Iowa, Kansas, New Jersey, New Mexico, Oklahoma, Oregon, and Washington. In these states, the entire IRA balance is exempt from judgment creditors outside of bankruptcy, regardless of how much the account holds.

Florida falls into this category but goes further than most. Florida Statute 222.21 protects traditional IRAs, Roth IRAs, SEP-IRAs, SIMPLE IRAs, rollover IRAs, and inherited IRAs without any dollar cap. The inherited IRA protection is particularly significant because most states do not extend their exemption to inherited accounts, and federal bankruptcy law excludes inherited IRAs from the retirement account exemption entirely.

States with Dollar Caps

Several states limit IRA creditor protection to a specific dollar amount. The caps vary widely.

Nevada exempts up to $500,000 per IRA account. South Dakota caps its exemption at $1 million. North Dakota limits protection to $100,000 per account with a $200,000 aggregate cap across all accounts. Minnesota exempts up to $69,000, with additional protection available if the debtor demonstrates the funds are necessary for support.

Dollar caps create a meaningful risk for high-net-worth individuals. An IRA balance that exceeds the state cap is exposed to creditor claims for the excess amount. Individuals in capped states who accumulate significant retirement savings may benefit from diversifying into ERISA-qualified employer plans such as a 401(k), which receive unlimited federal protection regardless of state law.

States with Needs-Based Protection

A smaller group of states limits IRA protection to amounts reasonably necessary for the debtor’s support or the support of dependents. California is the most notable example. California exempts traditional IRAs only to the extent necessary for retirement support, and its statute does not clearly protect Roth IRAs at all.

Georgia similarly limits its IRA exemption to amounts necessary for the debtor’s support and does not exempt Roth IRAs. Nebraska and Maine follow the same pattern, with Maine capping protection at $15,000 unless the debtor demonstrates a greater need.

Needs-based standards introduce uncertainty because the amount protected depends on judicial evaluation of the debtor’s circumstances. A court determines what the debtor reasonably needs for retirement, considering age, health, income, and other available resources. The same IRA balance might be fully protected for a 62-year-old retiree and only partially protected for a 35-year-old professional.

States That Exclude Roth IRAs

Several states protect traditional IRAs but do not extend the same protection to Roth IRAs. California, Georgia, Maine, Mississippi, Nebraska, and West Virginia fall into this category. The exclusion typically results from statutory language that references tax-deferred retirement accounts, which technically excludes Roth IRAs because Roth contributions are made with after-tax dollars.

The practical impact depends on the size of the Roth IRA relative to other protected assets. A debtor in one of these states with a large Roth IRA balance faces meaningful exposure that would not exist with a traditional IRA or an ERISA-qualified plan.

Inherited IRA Protection

Federal bankruptcy law does not protect inherited IRAs. The U.S. Supreme Court ruled in 2014 that inherited IRAs are not retirement funds within the meaning of the federal bankruptcy exemption because the beneficiary did not set aside the money for their own retirement.

A small number of states have enacted statutes that specifically protect inherited IRAs from creditors regardless of the federal rule. Florida, North Carolina, South Carolina, and Texas each provide explicit statutory protection for inherited IRAs. In these states, a beneficiary who inherits an IRA can protect it from creditors using the state exemption even in bankruptcy.

In states that do not specifically protect inherited IRAs, the beneficiary’s creditors may be able to reach the inherited account. Naming a trust with spendthrift provisions as the IRA beneficiary, rather than the individual, can preserve creditor protection regardless of which state the beneficiary resides in. Florida’s unlimited IRA exemption under § 222.21 extends to inherited accounts, making it one of the strongest retirement asset protection frameworks in the country.

IRA Creditor Protection Lookback Periods by State

Many states deny protection for IRA contributions made within a specified period before bankruptcy or a creditor claim. Lookback provisions target last-minute transfers of non-exempt assets into protected retirement accounts.

Alaska, Arizona, Kentucky, and Michigan each deny protection for contributions made within 120 days before bankruptcy. Louisiana and Pennsylvania use a one-year lookback. Hawaii applies a three-year lookback period. New York denies protection for contributions made within 90 days before a judgment. Montana takes a different approach, denying protection for contributions that exceed 15% of the debtor’s gross income in the year before bankruptcy.

Florida has no contribution lookback period in its IRA exemption statute. However, a contribution made with the intent to hinder, delay, or defraud creditors can still be challenged as a fraudulent conversion under Florida Statute 222.30. Withdrawals from a protected IRA also raise separate questions about whether the funds remain exempt once distributed, an issue addressed in Florida’s retirement account withdrawal rules.

IRA creditor protection is one component of Florida’s broader asset protection framework, which also shields homestead property, wages, annuities, and life insurance from most judgment creditors.

State-by-State Comparison Table

State	IRA Exempt	Roth IRA Exempt	Special Provisions
Alabama	Yes	Yes	No additional restrictions
Alaska	Yes	Yes	Contributions within 120 days before bankruptcy not exempt
Arizona	Yes	Yes	QDRO claims not exempt; 120-day lookback
Arkansas	Yes	Yes	Exemption constitutionality challenged for contract claims
California	Partly	No	Exempt only to extent necessary for retirement support
Colorado	Yes	Yes	Subject to child support and felonious killing claims
Connecticut	Yes	Yes	No restrictions
Delaware	Yes	Yes	Not exempt from domestic relations claims
Florida	Yes	Yes	Inherited IRAs protected; unlimited; subject to QDRO
Georgia	Yes	No	Exempt only to extent necessary for support
Hawaii	Yes	Yes	3-year lookback for contributions before bankruptcy
Idaho	Yes	Yes	Applies only to negligence/wrongful act claims
Illinois	Yes	Yes	No restrictions
Indiana	Yes	Yes	No restrictions
Iowa	Yes	Yes	No restrictions
Kansas	Yes	Yes	No restrictions
Kentucky	Yes	Yes	120-day lookback; not exempt from child support
Louisiana	Yes	Yes	1-year lookback for contributions before bankruptcy
Maine	Partly	No	Exempt up to $15,000 or as necessary for support
Maryland	Yes	Yes	Not exempt from health department debts
Massachusetts	Yes	Yes	Not exempt from divorce, child support, or restitution
Michigan	Yes	Yes	120-day lookback; not exempt from family court orders
Minnesota	Yes	Yes	Exempt up to $69,000, plus support-based additional protection
Mississippi	Yes	No	No additional restrictions
Missouri	Yes	Yes	3-year lookback for fraudulent transfers before bankruptcy
Montana	Yes	Yes	Contributions exceeding 15% of gross income in past year not exempt
Nebraska	Partly	No	Exempt only if necessary for support
Nevada	Yes	Yes	Exempt up to $500,000 per account
New Hampshire	Yes	Yes	Applies only to debts incurred after 1999
New Jersey	Yes	Yes	No restrictions
New Mexico	Yes	Yes	Fully protected
New York	Yes	Yes	90-day lookback for contributions before judgment
North Carolina	Yes	Yes	Inherited IRAs specifically protected
North Dakota	Yes	Yes	$100,000 per account, $200,000 total cap
Ohio	Yes	Yes	SEPs and SIMPLE IRAs not exempt
Oklahoma	Yes	Yes	No restrictions
Oregon	Yes	Yes	No restrictions
Pennsylvania	Yes	Yes	1-year lookback for contributions exceeding $15,000
Rhode Island	Yes	Yes	Not exempt from divorce or child support
South Carolina	Yes	Yes	Inherited IRAs specifically protected
South Dakota	Yes	Yes	Exempt up to $1 million
Tennessee	Yes	Yes	Not exempt from QDROs
Texas	Yes	Yes	Inherited IRAs specifically protected
Utah	Yes	Yes	1-year lookback for contributions
Vermont	Yes	Yes	Non-deductible traditional IRA contributions not exempt
Virginia	Yes	Yes	Not exempt from child/spousal support
Washington	Yes	Yes	No restrictions
West Virginia	Yes	No	No additional restrictions
Wisconsin	Yes	Yes	Not exempt from family court orders
Wyoming	Partly	Partly	Exempt only for solvent contributions