Bankruptcy Lets You Keep Your Retirement Nest Egg

California Pension and Retirement Exemptions
Will I Lose My Retirement Savings If I File For Bankruptcy?

Retirement accounts that are recognized by the IRS are exempt by law in bankruptcy up to over a million dollars. State law may provide additional protection for specific kinds of pensions, under state law.
California Motor Vehicle Exemption & Other Personal Property Exemptions
Public Benefits Exemptions for California

Last Reviewed: Tue, Mar 9, 2021

Virtually all types of tax-exempt retirement accounts are exempt in bankruptcy, whether you use the state or federal exemptions. You can exempt 401(k)s, 403(b)s, profit-sharing and money purchase plans, IRAs (including Roth, SEP, and SIMPLE IRAs), and defined-benefit plans.

These exemptions are unlimited—that is, the entire account is exempt, regardless of how much money is in it—except in the case of traditional and Roth IRAs. For these types of IRAs only, the exemption is limited to a total value of $1,512,350 per person (this figure will be adjusted every three years for inflation). If you have more than one traditional or Roth IRA, you don’t get to exempt $1,512,350 per account; your total exemption, no matter how many accounts you have, is $1,512,350.

  • If you are using the federal bankruptcy exemptions, you can find this retirement account provision at 11 U.S.C. § 522(d)(12) and the current exemption amount in 11 U.S.C. § 522(n).
  • If you are using state exemptions, cite 11 U.S.C. § 522(b)(3)(C) as the applicable exemption when you complete your bankruptcy papers.

Pension & Retirement Exemptions — State System

Pension & Retirement Exemptions under California Law 

California Exemption System 1

California Exemption System 2

Federal Non-Bankruptcy Pension & Retirement Exemptions
(available only if using State System)

Pension & Retirement Exemptions — Federal System § 522(d)

Can California debtors use the Federal Bankruptcy exemptions instead of California exemptions?

No. Federal exemptions not available. Instead, California has two systems of exemptions, one of which closely mirrors the federal scheme. Cal. Civ. Proc. Code § 703.130 

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.


Jurisdictional relevance: There are versions of this article for each State.
Selected State: California
California Motor Vehicle Exemption & Other Personal Property Exemptions
Public Benefits Exemptions for California

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