BreadWithSpam[at]fractious.net wrote:

- quote -

I had the same thought. Roth contributions (not to be confused
with conversions) can be withdrawn at any time without penalty.
I'd guess that CCH and RIA will issue some informed speculation
on this issue in the near future.

MTW

beliavsky[at]aol.com writes:

- quote -

Yep.

Mentions the bankruptcy law having a cap on protected assets
(a million bucks).

Interesting thing about the ruling - according to the
articles I've read, they key to the ruling was that
In rejecting the lower-court ruling, the Supreme
Court emphasized that unlike savings accounts,
early withdrawals from IRAs trigger 10% tax
penalties. "That penalty erects a substantial
barrier to early withdrawal," Justice Clarence
Thomas wrote in the court's opinion. "Funds in a
typical savings account, by contrast, can be
withdrawn without age-based penalty."

If that's the basis for the protection of IRA assets,
it would appear, to me, to not protect contributions
to a RothIRA, which can be withdrawn without penalty (not
the *earnings* in the Roth, but original contributions).

It should be interesting to see how this ruling filters
down in the details.

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The Wall Street Journal April 5, 2005 issue discusses the ruling on
page D1.

This mainly affects states in which they weren't already
protected (apparently only a small subset of them), but
the Supreme Court ruled today that funds in IRAs are
"exempt under federal bankruptcy law to the extent that
they are necessary for the debtor's financial support".

I'm not sure exactly what constitutes that second clause -
does it, say, not protect IRA money belonging to a working
30-year-old?

Nevertheless, it's an interesting ruling and, if anything,
simply strengthens the case for putting as much into one's
IRA as possible in general.

One of many articles you'll see about this starting to appear:

<http://www.bloomberg.com/apps/news?p...H25og&refer=us
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