True Investment Diversity with a Self-Directed IRA
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Transcript of True Investment Diversity with a Self-Directed IRA
True Investment Diversity with a Self-Directed Retirement Plan
Small Business BootcampWebinar Series
Friday, January 8, 2016
StarringChris Tanner: Co-Founder, Diverse Retirement Solutions Clay Malcolm: Chief Business Development Officer, New Direction IRA
Moderated by Krista Morgan, Cofounder and CEO, P2Binvestor
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Housekeeping
• We’ll have a 45 min session with 15 minutes of Q&A at the end.
• If you have questions during the webinar feel free to enter them in the chat window on the left of your screen and we will address them as we go.
• No worries if you need to drop off early. We will be sending out a copy of the deck and the webinar video to everyone who registered.
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Disclaimer
• New Direction IRA, Inc. and Diverse Retirement Solutions do not provide investment advice or endorse any products. Neither are the agent for any investment provider nor investment.
• All information and materials are for educational purposes only. All parties are encouraged to consult with their financial advisors before entering into any type of investment.
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Tax-deferred/free plans eligible for self-direction
• Individual accounts – Traditional – Roth – HSA – Health Savings Accounts
• Employer accounts– SEP IRA – Simplified Employee Pension – Simple IRA – Savings Incentive Match plan – 401(k) Plan
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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IRA vs 401k – or both!
• IRA– Social security
number – Custodian-based
• 401(k) – EIN Number (self-
employed) small business owner
– Employer-based – Higher contribution limits– Loan provisions – Roth, PSP, Traditional
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Rollovers
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Traditional to Roth conversions
• Taxable event• No limits (not subject to annual contribution limit)• Taxes as regular income for that tax year • Five-year rule
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Traditional to Roth conversion
• Total tax analysis• Speculation on tax rates • Tax year with tax credits or losses
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Considering accounts
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
Contribution Limits
Distribution Rules
Tax Advantage
• How much• Employer and or Employee• HSA does not count against personal limit• Age limit• Income limit
• Required Minimum Distributions• 5 year Rule
• “Pre-Tax” in/taxed on the way out• “Post-Tax” in / no tax on the way out
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Considering accounts
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
What accounts do you have already?
Self Employed?
Tax Bracket when you take distribution
Contribution Sequence
Generational Wealth
• Combine them• Put the $ where you can invest in assets
you want
• SEP or Indv. 401(k)
• Total Tax Analysis• Traditional to Roth conversion
• 401(k) first, HSA first, etc.
• Beneficiaries, Roth v. Traditional
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What can you invest in?
• Real Estate?– Fix & flip vs. rental– Investment vs. personal
• Precious metals?• Businesses? Active vs. passive• Grass seed? What?
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Case study -
PersonalFinances
IRA401(k)HSA
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Traditional IRA distribution basics
• At age 59.5, distributions are no longer subject to 10% early-withdrawal penalty. Distributions are taxed by adding the amount distributed to the account holder’s personal income for that tax year.
• Between 59.5 and 70.5, distributions are at the discretion of the account holder.
• At age 70.5, Required Minimum Distributions (RMD) begin and the account holder can no longer make contributions.
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Roth IRA distribution basics
• An account holder can distribute the amount of their contributions at any time without penalty.
• At age 59.5, distributions are no longer subject to 10% early-withdrawal penalty plus taxes.
• Distributions are at the discretion of the account holder. • There are no RMDs with a Roth, and the account holder
can continue to make contributions. • Five-year rule
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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IRA distribution basics
• A distribution can be taken in cash or in-kind • With a cash distribution, the IRA holder liquidates assets
within the account and then has a check sent to them• With an in-kind distribution, the asset itself (or some
percentage of the asset) is distributed to the account holder. • The process from in-kind distributions differs according to the
asset type. • If the distribution is coming from a Traditional IRA, tax is due
on the value of the distribution.
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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IRA distribution basics
• Similar to the way that an account holder can distribute a percentage of the cash in their IRA over a number of years to spread out the tax burden, an in-kind distribution can take place over a number of years.
• Valuation prior to distribution of an “alternative” asset may need to be more formal than regular annual valuations.
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Cash flow strategies
59.5 70.5
Cash producing assets (s)
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Cash flow strategies
59.5 70.5
Cash producing assets(s)
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Cash flow strategies
59.5 70.5
Cash producing assets (s)
Cash producing assets(s)
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Cash flow strategies
59.5 70.5
Cash producing assets(s)
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Cash flow strategies
59.5 70.5
Cash producing assets(s)
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Plan for Required Minimum Distribution (RMD)
• Assets that produce cash flow could cover some or all of an RMD. – Rental real estate – Note– Private equity that generates dividends
• Another IRA with liquid assets
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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IRA beneficiary basics
• An IRA can name beneficiaries • It is important to designate beneficiaries properly with specifics like
social security numbers. • Beneficiaries can be changed at the discretion of the IRA holder. • IRAs that are passed on to beneficiaries are not subject to probate. • If no beneficiaries are named, the tax consequence for the account can
increase dramatically. • The spouse of the deceased can rollover the IRA into their own IRA or
treat it as a Beneficiary IRA.• A Beneficiary IRA can be distributed all at once or spread over the
beneficiary’s lifetime.
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
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Q&A: Ask us anything!
Krista Morgan@krismtl
p2bi.com(720) 361-1500
Clay Malcolm @NewDirectionIRA
(877) 742-1270
Chris Tanner@ChrisTannerDRS
diverseretirementsolutions.com(970) 316-2099
P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016
New Direction IRA1070 W. Century Dr.Suite 101Louisville, CO 80027(877) 742-1270
Diverse Retirement Solutions
Specializing in:Self Directed
401(k)sStripPlan.com
(970) [email protected]
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Banks, schmanks. We’ve built a better business loan.
899 Logan St Ste 210Denver, CO 80203720.361.1500P2Bi.com | [email protected]
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P2Binvestor Small Business Bootcamp Webinar Series P2Bi.comTrue Investment Diversity | Jan 8, 2016