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With A Self Directed IRA From accu plan. The $ 100 million IRA. Is it possible? Yes Is it legal? Yes Is it allowed by the IRS? Yes, for over 30 years. How is this possible and how is it done?.

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Presentation Transcript
slide2

The $ 100 million IRA

  • Is it possible? Yes
  • Is it legal? Yes
  • Is it allowed by the IRS? Yes, for over 30 years
slide3

How is this possible and how is it done?

  • Invest in early stage companies and other alternative assets such private equity and debt, hedge funds, commodities, real estate and precious metals.
  • Use a Self-Directed IRA
slide4

Why alternatives?

  • Better performance by accessing early stage company returns (alternative assets grew at a 14.2% compound annual growth rate from 2005 through 2011 compared to 1.9% growth for non-alternative investments.)
  • Better diversification and more stable returns
  • Mainstreaming of alternatives to become 28% of average portfolio by 2013
  • Alternative funds generates 2 to 3 times the revenue than traditional funds
slide5

Why Self-Directed IRA’s?

  • Tax-deferred or tax free growth
  • The only kind of IRA that can invest directly into real alternatives
slide6

What is a Self-Directed IRA?

  • A Self-Directed IRA or SDIRA is an IRA that is designed to let the IRA holder invest in alternative assets other than stocks, bonds and mutual funds. They are like any IRA in regards to IRS Code 590 in regard to contributions, distributions, rollovers and transfers
  • Self-Directed IRA’s are available in Traditional, Roth, SEP’s, I-401K’s, HSA’s, and Coverdell Educational Accounts
slide7

Why didn’t my broker/attorney/CPA/realtor tell me about a SDIRA?

  • In all fairness, it is unlikely that they are familiar with SDIRA’s
  • It is a small industry, representing approximately 1% or $86 billion out of a $6 trillion retirement industry
slide8

Why doesn’t my broker offer SDIRA’s?

  • Margins are too thin – Annual fee is $275 per year regardless of account size
  • Liability – SDIRA providers do not sell any asset or investment, or are allowed to offer advice
slide9

What’s the Catch – IRS Code 4975

  • Prohibited Assets – Life Insurance and Collectibles (art, jewelry and baseball cards)
  • Prohibited People – You and spouse, lineal ascendants/descendants and spouses
  • Prohibited Transactions – Buying, selling, leasing, exchanging, personal use or compensation
  • Penalties – Taxable distribution of asset plus 15% penalty to IRS taking all retirement accounts
slide10

Process – 3 steps and 3 weeks

  • Open the account – on-line
  • Fund the account – Direct rollover or transfer, annual contribution
  • Direct or instruct the custodian to make the investment
slide11

The Checkbook IRA

  • A checkbook IRA is simply a marketing term for investing your IRA into a newly created LLC that is owned by the IRA with a local business checking account created for the LLC
  • It is not an actual type of IRA product
slide12

Why would I need a checkbook IRA?

  • Are you going to have multiple investors’ other than yourself investing into an entity?
  • Are you going to have multiple limited partners (hedge fund) or multiple tenants (real estate)?
  • Are you going to buy multiple assets (several hedge funds, private placements or properties)?
  • Are you going to have to write multiple monthly checks?
slide13

Self-Directed IRA Types and Contributions

  • 401K Rollover to Traditional – complete or partial transfer
  • Traditional - $5,000
  • Roth - $ 5,000
  • SEP - $ 50,000
  • I-401K - $ 17,000
  • Health Savings Account - $ 6,250
  • Coverdell Education - $2,000
slide14

How do we get to the $100M IRA?

  • Invest in early stage companies and other alternative assets such private equity and debt, hedge funds, commodities, real estate and precious metals
  • Support the Jobs Act and crowdfunding – get ready
  • Implement alternatives already utilizing or know
  • Use a Self-Directed IRA
  • Learn and get educated on Self-Directed IRA’s
slide15

One final thought – the economic/political impact of crowdfunding and SDIRA’s

  • Coming retirement crisis of 78 MM baby boomers and a bankrupt Social Security Admin in 2032
  • Tax-deferred or tax free returns on early stage companies in IRA’s
  • Coming healthcare crisis for all Americans and Medicare and Medicaid bankrupt in 2034
  • Tax free returns on early stage companies in HSA
  • Current crisis for affordable education for our children
  • Tax free returns on early stage companies in education accounts