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.


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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


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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


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Rollovers


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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


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Traditional to Roth conversion

• Total tax analysis• Speculation on tax rates • Tax year with tax credits or losses


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Considering accounts


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


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?


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Case study -

PersonalFinances

IRA401(k)HSA


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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.


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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


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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.


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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.


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Cash flow strategies

59.5 70.5

Cash producing assets (s)


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59.5 70.5

Cash producing assets(s)


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59.5 70.5

Cash producing assets (s)



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59.5 70.5



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59.5 70.5



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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


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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.


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Q&A: Ask us anything!

Krista Morgan@krismtl

@[email protected]

p2bi.com(720) 361-1500

Clay Malcolm @NewDirectionIRA

[email protected]

(877) 742-1270

Chris Tanner@ChrisTannerDRS

[email protected]

diverseretirementsolutions.com(970) 316-2099


New Direction IRA1070 W. Century Dr.Suite 101Louisville, CO 80027(877) 742-1270

[email protected]

Diverse Retirement Solutions

Specializing in:Self Directed

401(k)sStripPlan.com

(970) [email protected]


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True Investment Diversity with a Self-Directed IRA

Small Business & Entrepreneurship

Transcript of True Investment Diversity with a Self-Directed IRA