Does a Roth IRA provide better creditor protection than a traditional IRA?  The answer is yes.  This is because with a traditional IRA, you have to begin taking mandatory required distributions (MRD’s) starting in the year you reach age 70 1/2.  These distributions can become a potential target for creditors.  You are not required to take any funds out of a Roth IRA.

Even though a Roth IRA may be a little better for asset protection purposes, you certainly do not want to convert a traditional IRA into a Roth IRA solely for this reason.  Tax considerations will likely be your main focus.  In a traditional IRA, you make contributions in pre-tax dollars, but you must pay tax when you withdraw the funds.  With a Roth IRA, you make contributions in after-tax dollars, and there is no tax when you withdraw the funds.  Converting a traditional IRA to a Roth IRA could result in a significant tax bill.  Such a conversion may or may not be a good idea, depending on your individual situation.

As I have emphasized many times before, a solid asset protection plan can only be developed by focusing on all your assets and liabilities.  Funds in any kind of IRA are going to be a lot better from an asset protection standpoint than funds in an individual investment account.  The Roth IRA simply has an advantage in that there is no requirement to withdraw any funds.