Dec 31

Maximize Your 401k Plans Now!

For most people, today is the last day to maximize your 401k plan contributions.  You can contribute up to $17,000 this year ($5,500 more if you are at least 50).  Even if you can’t contribute the max, at least contribute enough to get the full match from your employer.  That’s a 100% return you will not find anywhere else!

If you are self-employed and have a solo 401k plan, today is also the last day to contribute for 2012.  You can contribute up to $50,000.  Since it is optional, you don’t have to contribute if you had a slow year.  If you did not contribute that much this year, now is the time to start planning for next year.  You’re in charge of your own retirement planning.  You don’t have an employer that will automatically deduct your contributions from your pay check.  Be proactive and set a schedule for saving and stick with it!

If you turned 50 this year, don’t forget you can sock away more money than you used to be able to.  That’s an extra $1,000 you can contribute to a traditional or Roth IRA.  You have until April 15th to do so.

Here are the new 2013 IRS rules that will help you sock away more money in individual retirement accounts and your 401(k)s, provided you qualify under the adjusted gross income limitations:

  • The annual limit on contributions to 401(k) plans is rising to $17,500 from $17,000. Annual contributions to IRAs, both traditional and Roth, are rising to $5,500 from $5,000.
  • For those over 50 years old, the additional “catch-up” amount allowed will remain the same at $1,000.
  • For solo 401 (k) plans, the limit will be $51,000, or $56,500 including catch-up contributions, in 2013.
  • For married couples, the upper income limit on contributions to Roth IRAs will rise to $188,000 from $183,000. For singles, the limit will jump to $127,000 from $125,000.
  • More than 56 million Social Security recipients will see their monthly payments go up by 1.7 percent next year. Social Security payments for retired workers average $1,237 a month, or about $14,800 a year. A 1.7 percent increase will amount to about $21 a month, or $252 a year, on average.
  • Americans living overseas are eligible for the foreign earned income exclusion of up to $97,600, up from the current $95,100.
  • The limit on tax-free gifts will rise to $14,000 from $13,000. Spouses can combine their annual exclusions to double the size of the gift.

Credit goes to for that info.

If you need help setting up a Solo 401k plan or even a self-directed IRA, contact the tax experts at the IRA Financial Group today!

Dec 27

How to Save $10K on Taxes with a Solo 401k

An Individual or Solo 401k is a great retirement vehicle for the self-employed and sole proprietors.  They’re simple and inexpensive to set up and offers great savings advantages.  The Solo 401k is an option for any owner-only businesses (which may include a spouse and other owners).  However, if you add employees to the plan, you have to switch to a traditional 401k plan.  You have until April 15, 2013 to contribute to a Solo 401k, however, you must set up the plan no later than December 31, 2012 to qualify.

With a Solo 401k, you can use it to your advantage as both the employer and employee.  You are allowed to contribute up to $50,000 ($55,500 if you are 50 or older) which is tax-deferred and might put you in a lower tax bracket as well.  The high contribution limits, tax savings and the ability to take penalty-free loans make this a must for any self-employed individual.

Compared to a traditional IRA, which many owner-only businesses utilize, you have 10x the limit you may contribute, larger catch-up contributions, no Roth income limit and penalty-free access.

Now, how can you save $10,000 on your tax bill?

Sole Proprietor Under 50 Years of Age




    Employee  contribution


    20% of net self-employment contribution


Total Tax-Deferred Savings


Taxable Income


While the owner earned $165,000 in 2012, only $115,000 is taxable by Uncle Sam.  Assuming an adjusted gross income (AGI) tax rate of 20 percent, that’s $10,000, she can now keep for herself (versus paying the taxman) in 2012.  In actuality, the tax savings is likely to be even greater as she may also drop a tax bracket.  For example, the married filed jointly 2012 tax rate increases from 25 percent to 28 percent for income over $142,700.     Credit

The IRA Financial Group is the leader in self-directed Solo 401k Plans.  Visit our website or give us a call at 800.472.0646 now for help in setting up your Solo 401k plan.

Dec 26

More Year End 401k To-Do’s

Here’s a few things to do before the end of the year in regards to your 401k plan from the good people at

Increase salary deferrals.  If you cannot contribute the max to your 401k each year, then you should at least increase the amount you do contribute every year by at least 1%.  If your plan has an auto-increase feature, then utilize it so the amount you contribute increases by the amount you want each year.

Treat your 401k as part of an overall portfolio.  “When deciding how to invest your 401(k) account, make sure it’s in harmony with your outside investments,” says Roger Wohlner.  These investments include your spouse’s retirement plan, an IRA, old 401k plans, stocks & bonds and investments such as rental properties.  Mr. Wohlner adds, “The point is to view your 401(k) account in light your overall portfolio and your financial plan and allocate your holdings accordingly.”

Review your plan.  You should review your account at regular intervals throughout the year and rebalance when holdings fall outside the target allocation range you have set.  If offered, utilize an auto-rebalancing feature in your plan.

Understand recent plan changes.  Towards the end of the year, companies often offer new investment options or other changes to the plan.  Make sure you know what the changes are and how they effect you.

Don’t default to a target date fund.  “Different funds from different families with the same target date often have widely different allocations and levels of investment risk. The quality of the underlying funds differs among various fund families. Expenses can vary widely. Some funds simply roll up the expense ratios of the underlying funds; others tack a management fee on top of the fund expenses. Don’t automatically default to the fund with the target date closest to your projected retirement. Instead, look at the allocation of the various funds in the series and pick the one that best fits your situation,” says Wohlner.

If you need help with your year-end retirement planning, contact a tax expert at the IRA Financial Group before it’s too late!

Dec 25

Happy Holidays

Just wanted to take a minute to wish everyone a very happy and joyous holiday season from the Bergman 401k Report.  Hope everyone had a Happy Hanukkah, a Merry Christmas and a Happy Kwanzaa.  Check back in tomorrow and the rest of the year to help get your retirement goals set for the end of 2012 and the start of 2013.

Contact the IRA Financial Group now to get off on the right foot for a prosperous new year!

Dec 20

Watch How the Solo 401k Plan Structure Works

Watch how the Solo 401k Plan Structure works

Watch how easy it to establish an IRS compliant Solo 401(k) Plan that will allow you to make high annual tax-deductible or Roth contributions – up to ten times the amount of an IRA, Borrow up to $50,000, and use your retirement funds to invest in real estate, precious metals, tax liens, your business and much more tax free and without custodian consent!

Learn how IRA Financial Group’s self-directed Solo 401(k) Plan will allow you to open your new plan account at any local bank and allow you to make investments by simply writing a check!

See how IRA Financial Group’s Solo 401(k) Plan will help you save for your retirement while allowing you to unlock a world of investment opportunities.

Work directly with our in-house tax attorneys to set-up an IRS compliant Solo 401K Plan. Our attorneys have worked at some of the largest law firms in the United States, including White & Case LLP and Dewey & LeBoeuf LLP.

Call us today at 800-472-0646 or visit our website and learn more about the benefits and tax advantages of establishing a Solo 401K Plan.  Take control of your retirement funds now! It’s quick and easy and we can have your Plan established in days!


Dec 19

Prioritizing Your Retirement Investing

You all know you should be saving for retirement and that the sooner you start the better off you’ll be when you do retire.  The questions is how should you go about investing?  Here’s a quick little guide from

1. Investing in your employer-sponsored 401k Plan.  Any contributions you make are tax deductible and the money grows tax-free until you take distributions in retirement.  If your employer offers a match, then you should contribute at least enough money to get the full match.  Here’s an easy example: if your employer matches 50 cents for every dollar you put in and will match up to 5% of your annual salary (let’s say $50,000), then you need to contribute $5,000 to get the full match.  (The full employer match is $2,500 and since they match half of what you put in, you need to double that amount.)  If your employer does not offer a match, you may want to skip this step for now.

2. Open a Roth IRA.  This is especially a good plan if you’re early in your working career and are not earning the highest salary.  You contribute after-tax dollars in a Roth so there isn’t an immediate tax break.  However, when you take distributions, they are completely tax-free.  For 2012, you may contribute up to $5,000 (plus another $1,000 if you’re at least age 50).

3. Maximize your 401k contributions.  After maxing out your Roth IRA, now’s the time to go back and try to do the same with your 401k plan.  This will lower your earned income even more and have more money that will grow tax-free until retirement.  Some employers, if you prefer, may offer a Roth 401k which follow similar rules to the Roth IRA.  Also, if you have self-employment income, you can open up an Individual or Solo 401k plan.

4. The SEP IRA.  If you are self-employed, look into a Simplified Employment Pension (SEP) IRA.  Limits are greater than the other IRAs, but are similar in the way they operate from a tax perspective.

Check out the full article here for more details.

Contact the IRA Financial Group to learn more and offer advice as to how you should manage your retirement investments.  Don’t forget to follow us on Twitter! @Bergman401k

Dec 17

5 Things to do with Your 401k Before 2013

Here’s what says you should be doing with your 401k plan before the end of 2012.  There’s only two weeks left in the year so get to it!

1. Get Your Free Money.  Many employers have gone back to matching your 401k contributions.  Typically, they match 50% of your contributions up to 6% of your annual salary.  Don’t lose out on FREE money!

2. Diversify out of Your Company’s Stock.  One of the worst things you can do is have your savings and paycheck coming from the same place.  The business may be doing great now, but you never know what will happen in the future.  Something goes wrong and you could be out of a job AND a diminished retirement account.  If your match comes in company stock, check the rules for when you can sell.

3. Pay off Loans Against Your Account.  If you’ve borrowed against your 401k, make a plan to pay it back quickly.  If you lose your job, you have 90 days to pay back the loan.  Failure to do so will cost you a ton of money you probably can’t afford to lose.

4. Invest More.  You are allowed to contribute up to $17,000 in your company’s 401k this year ($5,500 more if you’re at least 50 years old).  The more you can invest now, the more your 401k will earn for you.  Also, the more you invest, the less the plan fees will hurt you.

5. Take Your RMDs if You Need to.  If you are at least 70 1/2 years old and are retired, you need to make required minimum distributions from your 401k (even if you don’t need the money).  Failure to do so will lead to a 50% penalty on the amount that should have been taken.

If you have any questions of what you should be doing before the end of the year, don’t hesitate to contact a tax expert at the IRA Financial Group today!  Call us at 800.472.0646 now!

Dec 14

401k Fees: Pay Now or Later

If you contribute to an employer-sponsored 401k plan, then you know just how it easy it is to maintain.  There’s a set amount that comes out of your paycheck that funds your account and you’re pretty much on autopilot.  The one fallback is the cost of it.  There are many complicated rules you’re employer needs to follow when managing the plan.  And like everything in life, that costs money beyond mutual funds management fees and trading commissions.  More often than not, that cost is passed on to you, the employee.

There are two ways that employers pass on those costs.  Each has their own advantages and disadvantages.  Depending on you’re situation, you’ll lean to one over the other.

First, there’s a set amount that everyone pays.  This closely matches what’s driving the cost – the number of employees participating and much easier to calculate each person’s fee.  It doesn’t matter if you have $1,000,000 or $10,000 in the plan, the only thing that does matter is if you’re participating and how much you contribute.  The major disadvantage is for those who contribute little or are just starting to contribute.  If, say you contribute $2,000 per year and there’s a fee of $100 per participant, then you’re losing 5% just for participating.

Secondly, each participant’s fee would be proportionate to his or her balance.  Using the previous example, a rate at 0.2% would equal only $4 in fees of your $2,000 contribution.  However, if you contributed regularly throughout your career and have amassed $1,000,000 then you pay a fee of $2,000.

Forward-thinking individuals will see that the first option is the better choice.  A small flat fee is much better than the escalating fee that is sure to occur as your 401k grows.  Plus, if you’re determined to save for retirement (which you should be!), then maybe you’ll find a way to contribute a little more earlier on.

If fees are too high at your job, there are other alternatives to your company’s 401k plan which may be suited for you.  Contact a tax expert at the IRA Financial Group to see what’s the best way for you to plan for your retirement.

Dec 13

Self-Employed Saving More Than Employees with Public Companies

With the recent news that IBM will begin making contributions to employees’ 401(k) accounts in lump-sum annual payments, rather than at the time of each paycheck, likely diminishing 401(k) plan contributions for many employees, many public companies are expected to follow suit, according to a December 6, 2012 Wall Street Journal article titled, “Benefits Leader Reins in 401(k)s.” According to Adam Bergman, Esq, a tax attorney with the IRA Financial Group, companies switching to end-of-the-year matches typically save money because they don’t provide matching contributions for employees who leave during the year, other than those retiring. Most public companies, such as IBM, match from 3 percent to 6 percent of the amount the employee contributes to the account. However, an employee of a public company is generally able to defer up to $17,000 annually or $22,500 if the employee is over the age of 50. Whereas, with a solo 401k plan, a self-employed individual can defer up to $50,000 over $55,500 if the individual is over the age of 50. “Because most public companies have been reducing their 401(k) plan benefits, the solo 401(k) plan has offered self-employed individuals with higher employee deferral opportunities,” stated Maria Ritsi, a senior paralegal with the IRA Financial Group.

Across the country, some 60 million workers participate in 401(k)s, which have become a key source of retirement savings. Most companies match from 3 percent to 6 percent of the amount the employee contributes to the account. However, most public companies do not provide employees with any profit sharing contributions. Whereas, a solo 401(k) plan, also known as an individual 401k plan, provided self-employed individuals or small business with no full-time employees with the ability to defer up to 25% (20% in the case of a sole proprietorship of single member LLC), in addition to any employee deferrals up to a maximum annual contribution amount of $50,000 or $55,500 if the individual is over the age of 50.

A solo 401K Plan offers a self employed business owner the ability to use retirement funds to make almost any type of investment, including real estate, tax liens, private businesses, precious metals, and foreign currency on their own without requiring custodian consent tax-free! In addition, an individual 401K Plan will allow a plan participant the ability to make high contribution limits (up to $55,500) as well as borrow up to $50,000 for any purpose. In order to make annual tax deductible or after-tax contributions, the solo 401(k) Plan has to be established prior to December 31. Accordingly, it is very common for small business owners with no employees to start focusing on year-end tax planning towards the end of the year. “We are excited about providing a free platform to help small business owners determine the most tax efficient retirement solution based on each individual’s financial, retirement, and investment needs,” stated Mr. Bergman.

IRA Financial Group will take care of setting up the entire individual 401k Plan. The whole process can be handled by phone, email, fax, or mail and typically takes just several days to complete. Our 401k experts and tax and ERISA attorneys are on site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a tax attorney to help with the establishment of the Solo 401k Plan.

To learn more about the IRA Financial Group please visit our website at or call 800-472-0646.

Dec 12

What is a 403b Plan?

Most people know what a 401k plan is: an employer-sponsored retirement plan usually found in private businesses.  A 403b plan may be available if you work at a hospital, school, public charitable organization or if you’re a minister.  While the plans are similar, the latter may be easier to deal with than the former.

403b plans have been around longer than the 401k and although they are governed by different tax law, they are very similar.  Both are designed to allow employees to invest pre-tax money for their retirement while receiving a tax break and their money grows tax-deferred with no taxes due until distributed at retirement.  They both have the same contribution limits ($17,000 for 2012 and $5,500 more if you are at least 50 years old) and have penalties for early withdrawals.

Generally, employers are more “hands-off” when it comes to 403b plans and don’t offer a match to their employees’ contributions like many private sector employers offer.  However, if there is an employer match then it’s usually vested immediately without having to stay on the job for three or more years.

At first, you were required to invest in annuity products from life insurance companies which carried higher fees than mutual funds offered by 401k plans.  But for the last 40 years or so, the laws have allowed these mutual funds into 403b plans.  If you’re employer doesn’t offer these, you are at a disadvantage.

“The key to successfully using your 403(b) plan is to take full advantage of it. No other retirement savings vehicle provides as generous contribution limits as 403(b)s do, and the ability to reduce your current tax burden by thousands of dollars is hard to match elsewhere,” says Motley Fool contributor Dan Caplinger.  Like any other retirement plan, always compare your options (by cost, past performance and risk).  Know the fees and if you use products from a life insurance company, make sure they’re stable and secure.

For all of your retirement needs, contact the tax experts at the IRA Financial Group today!