If you have a retirement plan that qualifies under The Employee Retirement Income Security Act (ERISA), no creditor or third party can touch your retirement dollars. For that reason, an ERISA-qualified retirement plan can be a good way to protect your assets. Examples of ERISA plans include 401(k)’s, pension plans, and stock bonus plans.

There are some situations, however, in which ERISA plans are not protected from access by third parties. For example, they do not offer protection if you have a domestic relations order that requires you to pay a former spouse or other individual. ERISA plans also do not offer protection against IRS tax levies.

Before a creditor can garnish your income, they have to win a court judgment against you. In the case of non-ERISA plans, your assets are not as well protected because they are not automatically exempt from judgment creditors. However, if a creditor makes claim to your retirement assets in an attempt to settle a debt, you can file a document with the court called a claim of exemption in an attempt to stop the judgment creditor from trying to get a hold of your assets. For IRAs, annuities, and self-employed retirement plans, state law dictates the level of protection from third-party access to your retirement dollars. For example, the state of Ohio exempts traditional and Roth IRAs from various third-party actions, such as garnishment or selling assets to pay a judgment or order. It is a good idea to find out what level of protection your state offers.