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BGPenhollo asks,

I am unsure where this question belongs but it does touch on retirement investment accounts.

Someone indicated that IRA's, or 401K's are not touchable in a bankrupcy. My question concerns whether I need an umbrella insurance policy. My major assets are my home, my 401K, company stock options, and my IRA's.

If you take out my home, IRA, and 401K, my net worth might reach $100K if my vested but unexercised stock option are included. Toss my retirement plans and home into the mix and my networth is many time more than this.

I would hate to have an auto accident or home accident and have these retirement funds put into jeopardy through a lawsuit or having to claim bankrupcy. I've been looking into a 1/2 million to $1 milion umbrella policy to protect these assets.

Do I need an umbrella policy to protect my retirement plans and home? Better yet will such a policy do what I want it to do?

Whether or not an IRA/401k or Roth IRA can be attached to satisfy a judgement varies from state to state. Consult a local attorney.

An umbrella liability policy offers some protection, but there is still a remote chance you could be saddled with a $50 million judgement that would wipe out both your umbrella policy and all your other assets.

Still, the coverage is very cheap. I have a $5 million umbrella liability policy that costs about $250 per year. If you see a lot of multi-million dollar judgements being reported in your local newspaper, I'd take that as an indication that a $1 million policy probably isn't enough.

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