May 31

Using Your 401k to Buy a Business

Leaving your job or thinking of leaving your job and a have 401(k) qualified retirement plan or other type of retirement plan? Why not use your retirement funds to invest in yourself?  Why not use your 401(k) funds on a business you can run, manage, and even earn a salary from? Isn’t it time you placed your retirement future in your hands rather than trust Wall Street bankers?

With IRA Financial Group’s Business Acquisition structure, a new C Corporation is formed which will adopt a 401(k) Qualified Plan. Your existing retirement funds can then be rolled into the newly adopted 401(k) Plan tax-free. The 401(k) Plan will then purchase the stock of the new corporation. The new corporation will then use those funds to purchase a new business or franchise tax-free!

Use your 401k to open up a new businessWith the IRS compliant Business Acquisition Structure, you can earn a reasonable salary from your new business or franchise. You can also use your new 401(k) Plan to make high tax-deductible contributions – $51,000 ($56,500 if you are over the age of 50) and even borrow up to $50,000 for any purpose.

What does the IRS Say about this?

The Internal revenue Code explicitly permits the purchase of corporate stock by a 401(k) Qualified Plan. The IRS has repeatedly confirmed that the structure is legal but has expressed some concern about the potential for abuse by individuals not being properly advised by tax professionals. For example, the IRS has documented the following instances of abuse when it comes to using retirement funds to invest in a business: (i) the employees of the business are not properly informed that a 401(k) qualified plan has been adopted by the business and that they are eligible to participate, (ii) the individual that established the structure with no intention to use for business purpose and the sole purpose for establishment was to get access to the retirement funds without penalty, or (iii) the structure would be used to purchase assets for personal use with the retirement funds.

Therefore, the IRS has stressed that it is imperative that when using retirement funds to establish or finance a new or existing business or franchise, it is necessary to work with qualified tax professionals who have experience in this area and can make sure the structure is established in full compliance with IRS and ERISA rules and procedures.

IRA Financial Group’s Business Acquisition structure is an IRS compliant legal structure that one can use to invest retirement funds into a business they will operate and be employed by. Work with IRA Financial Group’s in-house tax professionals to help establish your IRS compliant Business Acquisition Solution.

Using IRA Financial Group’s Business Acquisition Solution is the only way you will be able to use your retirement fund to legally start or finance a new or existing business tax-free and penalty free! Whereas, with a self-directed IRA LLC, an individual can invest retirement funds in a private business, but not a business that he or she would be involved in – that would be considered a prohibited transaction pursuant to Internal Revenue Code 4975. While, with a Solo 401K, an individual could only borrow up to $50,000 or 50% of his or her account value whichever is less and use that loan for any purpose, including starting or financing a business. However, if an individual required more than $50,000 for a business, then the Business Acquisition structure is the only solution that will allow one to use their retirement funds to start or finance a business tax-free and without penalty!

To learn more about the advantages of using a Business Acquisition Structure to start or finance a business using retirement funds, please contact a retirement expert at the IRA Financial Group at 800-472-0646.

May 30

Tips to Boost Your 401k

The markets are doing well, 401k balances are reaching all time highs, but that doesn’t mean you just feel secure.  The crash of 2008 is not a distant memory.  You should be doing everything you can to make the most of your 401k plan(s).  Here are a few tips from MarketWatch.

The first tip is to invest in index funds.  This will reduce expenses and reduce asset turnover (which will also keep expenses down).  As a result, diversification will be improved and it’s the best way to control the exact asset classes in your portfolio.  If your plan does not have index funds in some asset classes, look at exchange traded funds or ETFs.  “Otherwise, remember that if you have access to an asset class (small-cap value stocks, for example) only through an actively managed fund, it’s more important to have that asset class than to hold out for only index funds,” says contributor Paul Merriman.

Utilize these tips to improve your 401k savingsNext, you contributions should be automatic.  Don’t look at a bear market and decide not to contribute.  In fact, this is one of the best times to invest.  You can buy assets at “below-average per-share prices”.  Deciding to contribute no matter the situation will take a lot of stress out of your retirement planning.

An easy piece of advice to stick with is to save as much as you can.  Even if you can’t afford to contribute the maximum every year, select a percentage of your pay to contribute, not just a dollar amount.  When you get a raise or bonus, more money will go towards your retirement.  Trust us, you won’t regret saving more now in the future.  You can go back in time to save more so do it now while you still can!

Lastly, don’t get too overconfident in the markets.  They’ve done staggeringly well over the last 12 months or so, but every investor knows that will change sooner or later.  The younger you are, the more risks you can take.  However, as you near retirement, you should look to include more bonds in your portfolio.  You don’t have as much time to makeup for a down year in the market.  If you are younger than 40, you should have mostly stocks, the reward is worth the risk and you have plenty of time to allow the markets to correct themselves over the years.

Utilize these bits of advice to make saving for retirement a little easier to take.  If you have any questions, contact one of our 401k experts at the IRA Financial Group today!

May 29

Ways to Manage Your 401k Efficiently

With the market’s recent upswing (up more than 20% in the last 12 months), many investors are tempted to make changes to their 401k investments.  You should be cautious when making changes to the plan though.   “It’s a retirement account. You are investing for not months or even years, but decades into the future,” says Eric Tyson, author of “Personal Finance for Dummies.”  He adds: “Most people, including most professional investors, are not very good at market timing.”

You should, however, make adjustments as you get older.  Here are a few tips from BusinessWeek.com to effectively manage your retirement plan:

First off is to never leave free money on the table.  If your employer offers a match, contribute until you receive the full match.  It’s free money after all!  After that, you should save as much as you can as early as you can.  The more money and time it has, the more earning power it has for you.  Experts agree that 15% is the magic number.  So if you get a 6% match from your employer, you should be contributing 9% of your salary.  The max 401k contribution for 2013 is $17,500 ($23,000 if you are age 50+).

Managing your 401k investments take a little bit of time and smarts.The market fluctuates from year to year, but on the whole, it usually brings a steady return.  However, don’t rely too much on the upswings.  Continue to invest as much as you can each year.  When the downswings occur, you’ll be able to rise up again.

Thirdly, you need to assess what your retirement-years costs will be.  You’ll need about 85% of your working salary to maintain a comfortable retirement.  This comes from all sources of income including your 401k, other retirement plans, social security, personal assets, etc.  “If you’re behind saving or want to retire at an earlier age, you may find when you crunch the numbers that to reach your goal you should be saving 15 or even 20 percent,” Tyson says. “If you’re at a point in your earnings career where your earnings are relatively high but you don’t think it’s going to last, you don’t want to keep working as hard, you may want to save 20 percent to 25 percent of your income during a certain period.”

Next, check your asset allocation at least annually.  By this we mean how much high-risk stocks do you have in your plan as opposed to low-risk bonds.  The nearer you are to retirement, the less risky your assets should be.  Also, if you’re invested in stocks that have risen a lot, shift that money into those that are undervalued at the time.

Further, don’t think you can time the market.  “Market timing changes people make are often made on emotional reactions to events,” Tyson notes. “It’s better to have an overall allocation, and stick to that.”  Most financial professionals cannot predict the market, so a novice surely won’t be able to do it on a consistent basis.

Lastly, catch up if you need to.  As stated above, once you reach age 50, the IRS allows you to contribute more to your 401k.  If you’re lagging behind on your savings, this is a great way to catch up.  Even if you think you’re on pace, it’s always good to contribute more if you can afford to.

It’s not always easy to stay on pace for a comfortable retirement.  With a little due diligence and some financial direction, you can do just that.  If you have any questions, feel free to contact the tax experts at the IRA Financial Group today!

May 28

No Excuses Not to Save for Retirement

Whether you are just starting out in the workforce, nearing retirement or somewhere in between, you should always be putting away something for retirement.  No matter how little your contribution might be, it’s better than nothing.  Here are some excuses people have and how you should go about avoiding them.

First off is thinking you’re too young to start saving/worrying about retirement.  You think retirement is so far away that you don’t need to start saving right away.  The fact of the matter is that the younger you start saving, the more money you’ll amass throughout your life.  If you were to start saving when you’re 25 as opposed to waiting until you’re 35, you’ll earn double if other factors are the same.  If you have a 401k plan available at work, contribute as much as you can, especially if your employer offers a match.  No plan at work, no problem!  Contribute to an Individual Retirement Account (IRA).  Cut back on frivolous saving now and you’ll thank yourself later.

Don't make excuses to not save for retirementThe stay at home parent or unemployed spouse thinks he or she cannot contribute to a retirement plan since he or she does not have earned income.  This is false!  As long as your spouse earns an income, you can contribute to a spousal IRA.  The max your spouse can contribute on your behalf is $5,500 (plus another $1,000 if you are at least age 50).  If you were to contribute $5,500 for ten years, after another 20 years, you’ll have over $294,000 if you earn 7%.

A major excuse is having too much on your plate that oftentimes, retirement saving comes in last.  Your basic tenet should be to pay yourself first.  Forgo the expensive vacation, wait to save for your children’s college, etc.  You should try to be debt-free before saving though.  Once your debt is gone, contribute the max ($17,500 for 2013 plus $5,500 if you are 50+) until you are on track.  Not sure if you are on track?  Set a goal and strive to attain it.

Next, is the procrastinator who thinks it’s too late to start saving for retirement.  It’s never too late to start saving for retirement.  Do as much as you can to contribute up to the maximum allowed each year.  If you’re at least 50 years old and can max out your 401k and IRA for 20 years, you’ll be up to $1 million in 20 years.  You can also opt for a Roth IRA which allow you to save for longer, plus give you tax-free distributions during retirement.  Consider rolling over if you have twenty or more years left of saving.  Finally, delay receiving social security benefits for as long as possible.

Hopefully, you’re in this last boat.  You’ve saved for retirement, so what else is there to do?  Do you have a plan?  Have you calculated your needs for retirement?  How about a financial adviser?  You need to stay involved with your retirement preparations.  Make sure you’re diversified and that you’re not paying too much in fees.  Check to make sure to see how your stocks are performing as well.

You should not make excuses when it comes to your retirement.  If you don’t know where to start or need an expert to help you out, contact the tax pros at the IRA Financial Group at 800.472.0646.

May 24

When a Roth 401k Makes Sense

Who benefits most from a Roth 401k:

Use a Roth 401k to help fund retirement

If the idea of tax-free growth throughout your lifetime sounds attractive to you, then using a Roth 401k could be one of the most valuable parts of your retirement savings strategy. But given all the other choices you have with the money you’re setting aside for retirement, figuring out when a Roth 401(k) is your best option can be complicated.

Whenever you have to consider tax issues in your investing, things can get complex in a hurry. But when you step back and consider the basics of the Roth 401(k) and how it works, there are some simpler guidelines you can use to decide whether the plans are right for you.

The basics of the Roth 401(k)
Most Americans are familiar with the traditional 401(k), in which you’re allowed to put money into an employer-sponsored retirement account on a pre-tax basis. By contributing to a regular 401(k), you’re able to reduce your current-year taxable income, giving you an immediate reduction in the amount of tax you pay. With contribution limits this year of $17,500 for those under age 50 and $23,000 for those 50 or older, the tax savings from using a traditional 401(k) can amount to thousands of dollars.

By contrast, the Roth 401(k) works differently. Rather than using pre-tax money, contributions to a Roth are done on an after-tax basis, meaning that you don’t get any upfront tax savings from putting money in the Roth. But in exchange for giving up the current-year tax break, you get what could be an even more valuable benefit: You’ll never have to pay taxes on the income your Roth 401(k) produces, even when you withdraw it from the account in retirement. By contrast, with a regular 401(k), you do have to pay tax at your normal income-tax rate when you make withdrawals in retirement.

So when is the Roth 401(k) a smart move?
Another way to look at the pre-tax versus after-tax issue is to ask yourself a question: What is your current tax bracket, and what’s your tax bracket likely to be after you retire? If you’re in a high tax bracket right now and expect your taxes to be lower in retirement, then the value of the upfront tax deduction is more than the taxes you’ll save after you retire. In this case, Roth-style retirement-plan accounts aren’t as valuable as a regular retirement plan.

But if you’re current tax rate is relatively low compared with what it could be later in your lifetime, then a Roth 401(k) makes a lot more sense. Essentially, a Roth 401(k) lets you lock in the tax rate you’re paying now, forever removing the money inside the account from whatever tax rates may prevail in the future.

In particular, three sets of people should take a close look at Roth 401(k) options:

  • Young adults. Usually, people have the lowest income when they’re just starting out in their careers, and therefore, their income-tax rates are likely to only get higher as their income rises. As attractive as a small tax break might be, using a Roth 401(k) is usually a better choice, as it lets you take advantage of those low rates while you have them.
  • Workers with substantial assets in taxable or non-Roth retirement accounts. At the other end of the spectrum, a Roth 401(k) can make sense even if you’re not in a low tax bracket right now. Wealthy people can’t expect to see their tax rates go down in retirement, as the amount of taxable income they’ll have from investment income and regular IRA and 401(k) distributions will probably keep them in top tax brackets even when they stop working. For them, locking in a high tax rate with a Roth 401(k) may be preferable to leaving yourself exposed to the even higher tax rates that could prevail in the future.
  • Those who want to hedge their tax bets. If you’re able to set aside a substantial amount toward your retirement, using a mix of Roth and regular 401(k) accounts and IRAs will give you the best of both worlds: some tax savings now along with some tax-free growth to provide benefits in the long run.

Give the Roth 401(k) a chance
Regardless of how you choose to invest, consider the Roth 401(k) if it’s available in your employer’s retirement plan. Escaping the tax man for life could well be worth the price of giving up a modest tax break now.

Have any questions?  Feel free to contact the 401k experts at the IRA Financial Group at 800.472.0646.  Be sure to follow us on Twitter @Bergman401k and have a great and safe Memorial Day Weekend!

 

May 23

Software Developers Selecting Solo 401k Plan over SEP IRA

Software developers and IT professionals establishing Solo 401(k) Plans to take advantage of retirement and investment benefits.

The IRA Financial Group, the leading provider of IRS compliant Solo 401(k) Plans, announces the strong demand from software developers for self-directed Solo 401(k) Plans Vs. the SEP IRA. “Until recently software developers were looking to establish a SEP IRA as their retirement vehicle of choice,” stated Adam Bergman, a tax attorney with the IRA Financial Group. However, the recent surge in popularity of the Solo 401(k) Plan based on the significant tax and investments inherent benefits compared to the SEP IRA as contributed to the popularity of the Solo 401(k) Plan. IRA Financial Group’s Solo 401K plan is perfect for self-employed Information Technology professionals looking to maximize their retirement savings.

Software developers choosing Solo 401k over SEP IRAsThe rising popularity of the Solo 401(k) Plan vs. the SEP IRA is a result of the EGTRRA tax law change that became effective in 2002. The law changed how salary deferral contributions are treated when calculating the maximum deduction limits for contributions to a Solo 401(k) Plan. This change created an opportunity for self-employed professionals, such as software developers and IT professionals, with no employees to put away additional amounts toward their retirement.

A Solo 401(k) Plan, also known as an Individual 401K or Self-Directed 401(k) Plan, offers one the ability to use their retirement funds to make almost any type of investment on their own, tax-free and penalty-free without requiring the consent of any custodian or person. “Establishing a Solo 401(k) Plan offers a number of tax, retirement, and investment advantages,” stated Adam Bergman, a tax attorney with the IRA Financial Group. “IRA Financial Group’s Solo 401(k) plan is unique and so popular because it is designed explicitly for the self-employed professional,” stated Mr. Bergman.

“There are many features of the IRA Financial Group’s Solo 401(k) plan that make it appealing for small business owners over the SEP IRA, such as high employee deferral contributions, loan feature, catch-up contributions, and no-tax on nonrecourse leverage for real estate transactions, ” stated Mr. Bergman. IRA Financial Group’s Solo 401(k) Plan high contribution limits will allow a plan participant to make annual contributions up to $51,000, with an additional $5,500 catch-up contribution for those over age 50. Additionally, IRA Financial Group’s Solo 401(k) Plan allows plan participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose, including paying credit card bills, mortgage payments, or anything else. The loan has to be paid back over a five-year period at least quarterly at a minimum prime interest.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market’s leading Solo 401(k) Facilitator. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate, without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

May 22

Why a 401k is Better Than a Pension

“It’s clear that most Americans aren’t saving enough for retirement, and it’s easy to put the blame on the current 401(k) and IRA retirement system. After all, the good old days when a traditional pension plan was much more popular seemed wonderful: You could quit your job, sit back and still get monthly income like clockwork.  But blindly claiming that the pre-401(k) days are better is just inaccurate, because there are plenty of reasons the do-it-yourself system is better,” says USNews.com contributor, David Ning.

First off, not everyone had a pension available to them.  Only about 40% of Americans were able to utilize this retirement plan.  The majority of workers did not have a great way to save for retirement.  Today, most large companies offer a 401k plan.  Even if one is not available to you, anyone can open and fund his or her own IRA plan.

Next, pensions take much longer to vest.  Normally, you need to stay with an employer for at least a decade to take full advantage of a pension.  If a better job opportunity arises, you are less to leave your current place of business since you will lose your pension and be stuck starting from scratch.  401k plans, on the other hand, are much easier to take with you.  Money you contribute is yours…no one can take it from you.  If you receive a employer match on those contributions, usually the vesting period is much, much sooner.

401k and IRA plans are better than pensionsTaxes are better controlled with a 401k or IRA.  When figuring out your taxes, you must include all monthly pension money.  This income, whether you need it or not, may force you to pay higher taxes than with other types of plans.  With a 401k, you can wait on distributions or only withdraw what you need.  You may even be able to convert money into a Roth option without ever paying taxes on that money.

When an emergency arises, you can utilize your 401k or IRA to pay for the expenses.  It’s never recommended to take money from your retirement savings, but you have that option if you need it.  Roth IRA contributions can be taken tax-free after five years.  You can take a loan out of your 401k at anytime.  You cannot do this with a pension and if you’re forced to leave a job for an emergency, you might lose your pension entirely.

A pension provides for you (and you alone) until you pass away.  If you’re smart and don’t need all of your retirement funds, you can usually leave your plan to a beneficiary.  Therefore, not only do you benefit from the plan, but so may your heir(s).

Finally, you can invest your 401k the way you want.  If you take the time to research, you can earn significantly more than you could ever make with a pension.  The onus is on you to make smart financial decisions.  It’s best to contact a financial adviser to help you invest your money smartly.  Afterall, future you is counting on present you!

If you have any questions or are looking to better understand your financial freedoms that 401k and IRA plans provide for you, contact the tax experts at the IRA Financial Group today!

May 21

Taking a Loan from Your 401k to Buy a Home

According to the National Association of Realtors, about 9% of recent home buyers borrowed money from their 401k plans (or pensions) to put a down payment on a new home.  Borrowing from your 401k is not a bad options considering the low mortgage rates today (about 3.5% on a 30-year fixed rate).  Be forewarned, there are several considerations you must know about.

When you borrow from your 401k, you pay the interest to yourself.  Normally, that’s a point or two above prime, which is 3.25% right now.  You may borrow up to half of your current 401k balance, up to a max of $50,000.  You must repay the loan within five years typically, though some employers may give you up to 15 years if you are buying a home.

Borrowing from your 401k to buy a new homeThe loan will not count against your debt to income ratio when you apply for a mortgage.  The reason being is that your loan is secured by the funds in your 401k.  Further, they are not reported to credit bureaus so the loan won’t hurt your credit score.

If you do not repay the loan, it will be treated as a taxable distribution.  You’ll owe taxes plus a 10% early withdrawal penalty if you are under age 59 1/2.  Moreover, if you leave your job for any reason, you’ll have only 60-90 days to repay the entire loan.  Again, the amount will be taxed and you’ll owe the early withdrawal penalty if you were under 55 when you left your job.

Although you’re paying yourself back, you’ll lose out on earnings you would have been receiving had you not borrowed from your plan.  Plus, if you stop contributing (or lessen your contributions) while you repay the loan, you’ll put yourself into a bigger hole.  Further, you’ll be repaying the loan with after-tax dollars.  When you start taking distributions during retirement, you will be taxed again.

An alternative is to go with a lower down payment, but you’ll end up with a higher interest rate and have to pay for mortgage insurance.  “Private mortgage insurance premiums range from 0.5% to 1.15% of your loan amount. PMI usually remains in effect until you have at least 20% equity in your home. Annual mortgage insurance premiums for FHA loans are higher — 1.35% for most loans — and remain in effect for the life of the loan,” adds Sandra Block at Kiplinger.com.  For more info, check out this article.

If you have any 401k-related questions, feel free to contact the tax experts at the IRA Financial Group today!

May 20

Free Webinar on Retirement Tax Planning Opportunities for 2013 & Beyond on Wednesday at 7:00PM EDT

IRA Financial Group, the leading facilitator of Self-Directed IRA LLC and Solo 401(k) Plans, announces a new free webinar as part of its educational series on the area of tax planning opportunities available for individuals and small business owners with retirement funds. The free webinar will be aimed at offering investors an extensive array of facts and information involving using Self-Directed retirement plans to maximize retirement and tax benefits. “The free webinar is designed to provide investors with a detailed overview of the Self-Directed retirement plan topic being discussed,” stated Adam Bergman, a tax attorney with the IRA Financial Group. “The Retirement Tax Planning Opportunities for 2013 & Beyond webinar is designed to provide investors with the tools necessary to understand the tax rules involved in Self-Directed IRA and Solo 401(k) retirement plans and how they can maximize their 2013 tax return,” stated Mr. Bergman.

free webinar for solo 401k and self directed IRA plansWith a new Medicare tax and uncertainty over tax rates for high-income individuals starting in 2013, learn what planning opportunities may apply to you. The Webinar will focus on a number of tax planning opportunities available for individuals and small business owners with retirement funds for 2013 and beyond.

The Webinar will be given by Adam Bergman, Esq, a tax attorney with the IRA Financial Group. The webinar will focus on the following topics:

·    The current environment – uncertainty rules
·    Impact of the Medicare taxes as well as Congress’ actions with respect to the Bush-era tax cuts
·    Deferring income in the age of increasing tax rates
·    How your IRA or Solo 401(k) Plan can help you minimize tax on your 2013 tax return
·    Combating higher tax rates with a Roth IRA or Roth Solo 401(k) Plan
·    In light of higher income taxes – should I consider a Roth conversion?
·    Tapping into your retirement funds without tax or penalty
·    Retirement savings is the best answer to higher income tax rates

To sign up for the free webinar, please click on the link below:

https://www3.gotomeeting.com/register/989541182

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the country’s leading provider of “Checkbook Control” Self Directed IRA LLC and Solo 401(k) Plans. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate, without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

May 17

The Individual 401k Home Purchase Plan

New Individual 401(k) Home Purchase Plan will allow Individuals to use up to $50,000 of their retirement account tax and penalty free to buy a Primary Residence

The IRA Financial Group Individual 401(k) Home Purchase Plan allows investors to borrow up to $50,000 from their retirement funds to purchase a primary residence. A Solo 401(k) loan is permitted at any time using the accumulated balance of the Solo 401(k) as collateral for the loan. A Solo 401(k) participant can borrow up to $50,000 or 50% of their account value – whichever is less. A standard Solo 401(k) loan has to be repaid over an amortization schedule of 5 years or less with payment frequency no less than quarterly. However, with the IRA Financial Group Individual 401(k) Home Purchase Plan, a loan for a primary residence can be repaid over a 15-year period. The interest rate must be set at a reasonable rate of interest, generally interpreted as prime rate plus 1%, which means participant loans may be set at very reasonable interest rate. The interest rate is fixed based on the prime rate at the time of the loan application.

 

The Individual 401(k) Home Purchase Plan allows investors to take a personal loan from their Solo 401(k) Plan and use it to purchase a primary residence. “Many retirement investors are looking to purchase a home with their retirement funds,” stated Adam Bergman, a tax attorney with the IRA Financial Group. “The IRA Financial Group Individual 401(k) Home Purchase Plan presents a number of exciting tax planning and investment opportunities that allow investors to purchase real estate,” Mr. Bergman added.

 

Use an Individual 401k plan to purchase a new homeInternal Revenue Code Section 72(p) and the 2001 EGGTRA rules allow a Solo 401(k) Plan participant to borrow money from the plan tax-free and without penalty. As long as the plan documents allow for it and the proper loan documents are prepared and executed, a participant loan can be made for any reason. The Solo 401(k) loan is received tax-free and penalty-free. There are no penalties or taxes due provided loan payments are paid on time. The IRA Financial Group Solo 401(k) Plan documents will allow investors to use a loan from their Solo 401(k) for any investment purposes, including real estate, funding an existing business or a new business, tax liens, private placements, etc.

 

In addition to the tremendous 401(k) benefits (tax-free profits, high tax contribution deductions – up to $56,500, asset protection and estate planning), the Solo 401(k) allows entrepreneurs to invest tax-free in investments that they know and understand and even allows them to borrow up to $50,000 or 50% of the account value for any purpose. Aside from certain “prohibited transaction” investments outlined in Internal Revenue Code Section 4975, a Solo 401(k) Plan can invest in most commonly made investments, including real estate, private business entities, public stocks, private stocks, and commercial paper.

 

IRA Financial Group is the market’s leading Solo 401(k) Facilitator. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate, without custodian consent.

 

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.