ASHINGTON, Dec. 1 - People who seek bankruptcy lose many of their assets to creditors, but not their Social Security benefits, their company pensions or their 401(k) plans, which are all shielded by law.

The question before the Supreme Court on Wednesday was whether the same protection extends to individual retirement accounts, the principal supplement to Social Security for millions of retirees.

The bankruptcy law, drafted in the 1970's before I.R.A.'s became such an important vehicle for retirement savings, is ambiguous, leading to contradictory rulings in federal courts around the country.

The case argued before the court on Wednesday was an appeal by an Arkansas couple, approaching retirement age, who tried to shield the $65,000 in their two I.R.A. accounts when they filed a joint bankruptcy petition in 2001.

The United States Court of Appeals for the Eighth Circuit, the federal appeals court with jurisdiction over Arkansas, ruled that the I.R.A.'s were not protected by the law. That court based its ruling on the wording of the statutory exemption, which preserves the debtor's right to receive retirement payments "on account of illness, disability, death, age or length of service."

Since anyone willing to pay a 10 percent penalty can withdraw money from an I.R.A. for any reason, the appeals court said, these accounts do not fit in the category of retirement plans that pay "on account of" age or the other listed factors.

Another federal appeals court, the Third Circuit, which sits in Philadelphia, has ruled that I.R.A. accounts are exempt from bankruptcy only when the account holder has reached 591/2, the age at which money may be withdrawn without penalty. Other courts have imposed no restrictions, reasoning that I.R.A.'s are similar enough to other retirement plans, all of which allow early withdrawals under at least some circumstances to fit within the definition and qualify for the exemption.

Pamela S. Karlan, a Stanford Law School professor who argued for the couple, Richard and Betty Jo Rousey, urged the Supreme Court to interpret the statute in a "holistic" manner, in light of Congress's evident purpose to preserve a secure retirement for people who declare bankruptcy.

She noted that the Rouseys financed their I.R.A.'s with money they were required to withdraw from the pension plan at Northrop Grumman, where both worked until Mr. Rousey was forced into early retirement and Mrs. Rousey was laid off. Had they been able to remain in the pension plan, their retirement assets would have been protected.

Colli C. McKiever, the lawyer representing Jill R. Jacoway, the trustee appointed to oversee the Rouseys' affairs and pay off their creditors, said that "unfettered access" to an I.R.A. made it "much more like a savings account" than a retirement plan. Savings accounts are not shielded from creditors in a bankruptcy.

The 10 percent penalty imposed by the Internal Revenue Service was "minimal" and did not operate as a bar to early withdrawals, she said.

"Let's try a million percent tax," Justice Stephen G. Breyer said to Ms. McKiever. "Does that operate as a bar?"

Noting that fewer than 2 percent of I.R.A. account holders withdraw money that is subject to the penalty, Justice Breyer suggested that "in a world that's not perfect," the 10 percent penalty should be regarded as an adequate deterrent.

A majority of the court appeared unpersuaded by Ms. McKiever's argument that the early-withdrawal feature placed I.R.A.'s on the savings-account side of the line.

"That's a hard line for you to try to draw," Justice Sandra Day O'Connor told her, noting that the retirement plans the law explicitly shields all allow early withdrawals, if only for rollovers after the termination of employment.

"I just don't see how your argument is going to work," Justice O'Connor said.

Justices Antonin Scalia and Anthony M. Kennedy, however, appeared to read the statute's text as excluding I.R.A.'s. Justice Kennedy repeatedly expressed concern that the right to withdraw money early meant that payments from an I.R.A. were not "on account of age."

In light of the ambiguity, many states, including New York and California, have enacted legislation to shelter I.R.A.'s from bankruptcy. Federal bankruptcy law permits people to avail themselves of any greater protections offered by state law. Nonetheless, if the Supreme Court interprets the law to withhold protection, the issue is likely to move quickly to Congress.

AARP, representing retired people, filed a brief on the Rouseys' behalf that told the court that there were "devastating consequences" to allowing I.R.A.'s to go unprotected in bankruptcy. The case is Rousey v. Jacoway, No. 03-1407.