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

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

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.

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

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

Rollovers

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

Traditional to Roth conversion

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

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

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

What can you invest in?

• Real Estate?– Fix & flip vs. rental– Investment vs. personal

• Precious metals?• Businesses? Active vs. passive• Grass seed? What?

Case study -

PersonalFinances

IRA401(k)HSA

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.

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

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.

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.

Cash flow strategies

59.5 70.5

Cash producing assets (s)

59.5 70.5

Cash producing assets(s)

59.5 70.5

Cash producing assets (s)

59.5 70.5

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

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.

Q&A: Ask us anything!

Krista Morgan@krismtl

@p2binvestorhello@p2bi.com

p2bi.com(720) 361-1500

Clay Malcolm @NewDirectionIRA

info@ndira.comNewDirectionIRA.com

(877) 742-1270

Chris Tanner@ChrisTannerDRS

info@diverseretirementsolutions.com

diverseretirementsolutions.com(970) 316-2099

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

info@ndira.comNewDirectionIRA.com

Diverse Retirement Solutions

Specializing in:Self Directed

401(k)sStripPlan.com

(970) 316-2099info@diverseretirementsolutions.com

Banks, schmanks. We’ve built a better business loan.

899 Logan St Ste 210Denver, CO 80203720.361.1500P2Bi.com | hello@p2bi.com

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