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Uncover the Dirty Truth of Taxes in Your Retirement

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Imagine getting into your retirement only realizing your partner, Uncle Sam, is taking 40%+ of what you thought you would have to spend after decades of hard work. The result? Less time with grandkids, less time to travel with your partner and more time with deep anxiety worrying about where your cash has gone.

However, in order to prevent your future self from living in retirement full of regret, you need to unlock the 2 money myths that will help you understand the devastating effect that taxes will have on your retirement without having to be an expert.

By the end of your time with Stephanie you will uncover what the 1% know about taxes, how you can accelerate your wealth and not live of life of scarcity in your retirement

Learning objectives:

  1. Discover the 3 steps to building a taxation plan that your future self will thank you for.
  2. Uncover the devastating truth about having all of your retirement “eggs” in a 401K basket.
  3. Uncover what the wealthy do to leverage bank money to generate tax-free income without taking market risk.

Stephanie Walter

www.erbewealth.com 

Stephanie Walter is a wealth strategist, capital raiser, syndicator, author and the CEO of Erbe Wealth. She recently retired and sold her insurance agency of 16 years by following the key principles she teaches professionals to use. She teaches professional people to “unlearn” what most of us have been wired to think about money and she re-educates people to learn the secrets of the wealthy investor that can be life transforming.

Over years of working with her investors, Stephanie discovered that the very wealthy view and use money differently than the rest of us; they actively have their money working for them — sometimes in several places at the same time! They also strategically look at tax mitigation on every investment. They use leverage to accelerate their wealth and give them tax free income upon retirement.

Stephanie realized these strategies can be used by anyone, not just the rich. Her passion is teaching people these concepts on attaining lasting wealth. Stephanie’s goal is to connect her select group of investors, “her tribe”, with investment opportunities that she’s found and researched to be extremely desirable. And at the end of the day, Stephanie is looking to help her investors reach their financial goals.

How to Choose Self-directed Retirement Plans for Your Future?

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By Dmitriy Fomichenko

Financing planning is an important aspect of real estate investing, and most of the realtors pay special attention to it. However, when it comes to retirement planning, we often prioritize other financial responsibilities instead. It’s critical to understand that you’ll need at least 80% of your current income to maintain your current standard of life during retirement. The good thing is that there are retirement options that allow you to accumulate retirement savings at a heightened rate. Self-directed retirement plans offer the freedom to invest in alternative assets, including real estate, mortgage notes, tax liens/deeds, precious metals, private equity, personal lending, and even the traditional stock/bond investments.

In order to help you choose the best self-directed retirement plan, our team has put together a small Infographic, comparing an SD IRA, IRA LLC, and a Solo 401k plan.

Infographic: Choosing self-directed retirement plans

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Empowering Your Investors to Retire Sooner

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By Dan Kryzanowski

Tips on Sponsorship and Syndicates

My Journey to Financial Independence

Who do I (or you) have more in common with, Joe Biden or Mitt Romney? Putting politics way aside on my response, my answer is both. Speaking with my business hat on, I morphed from Joe to Mitt.

The Early Days

While like Joe, I did grow up on the “mean streets” of Scranton, Pennsylvania. Actually, the streets were not so mean and life was wonderful as a child in the 20th century. I was also very fortunate that my parents had secure jobs – high school principal and social worker – with pensions in perpetuity! scranton-364185_1280 Grit was (and is still) a valued trait in northeast Pennsylvania (aka NEPA), with NEPA known as coal mining community with strong cultural ties and traditions. There was a solid deference to top-down organizations and assumption of middle-class comfort. In terms of real estate and investments, the primary residence was the only “alternative” asset for the supermajority. This held true for the single-earner family or high-flying businessman that made six-figures in the early 80s. That said, the immigrant sense of adventure shined with the true immigrants (i.e. first-generation Americans) born in the early 1900s. My great aunts and uncles strongly valued family gatherings, so purchased land and built houses outside of town. My entrepreneurial spirit flickered early, though primarily in the “non-profit” sense, to provide opportunities for my peers. I co-founded and stood up programming for a youth leadership group under Hugh O’Brian Youth Leadership (HOBY), and served as matchmaker years before LinkedIn and Facebook. Overall, life was wonderful as a child and teenager in NEPA in the 20th century.

Early Career

Sometimes it pays to be lucky, being in the right place at the right time with the right people. I spent college and my twenties studying and living in three countries (traveling to another 20), ten US states, and locations such as Martha’s Vineyard in the summer of 1998 to Austin, TX prior to the current (infinite?) population boom. I also picked up degrees at Wharton and Thunderbird and benefited immensely from a decade at Merrill Lynch and GE Capital. financial-2860753_1280 Life was good and I quietly built up a sizable 401(k) and healthy Roth IRA. Stocks trended upward, public REITs paid double-digit dividends and I could receive a whopping 6% on a risk-free Certificate of Deposit (CD)! I felt very “diversified” and sophisticated within the comforts on the Fidelity online portal.

Turning Point

While 9/11 was an obvious shock (I worked at 4 World Financial Center) and wake up call to potential horrors, day-to-day living (and investing) in the mid-2000s was quite comfortable. That, of course, all changed in September 2008. The curtain fell on the Wizard of Oz, and what was behind the curtain was not pretty (i.e. “trusted” institutions). Backing up a little bit, it should be noted that I rarely go against my gut feeling, and when I do it tends to put my entrepreneurial and investing endeavors on hold. Instead of remaining in Austin in mid-2008 to be at the forefront of the first true “organic” tequila, we ended up back in the northeast, paying $2,000 monthly for a condo with a view of a wall in Stamford, CT (when I literally could have bought a house in east Austin for $40K). Fast forward three winters, the reintroduction of state income tax, and dozens of pints for friends laid offer during the financial crisis – it was time to return “home” to Texas.

Keeping It Weird

austin-247_1280 Austin, and Texas in general, has a very educated investor base, with folks forming all types of syndicates to invest in everything from conservative multifamily preferred loans to restaurants that cater to dogs and comedy tours (“Ha”, said my CPA, when we wrote off this investment). I immediately cannonballed into both ends of the pool, opening a Self-Directed IRA (SDIRA) to invest in high-yield/low-risk real estate and effectively crowdfund some of my dividends and piggybank savings accounts into hotel/bar/restaurants across Austin, some of which we also own the dirt. Overnight, I morphed from Joe to Mitt. Regardless of deal type, what struck me most was the commonality and comfort of each deal lead to sponsor a syndicate. In the early 2010s this was still a grassroots effort, now aided by various Meetups and crowdfunding platforms. The wild card, though, which has yet to scratch the surface is the “green tsunami” of $10T (yes, trillion) that individuals will shift from stagnant, nameless mutual funds to sponsors/syndicates, with a strong percentage of these funds going towards real estate.

Storage, Baby!

storage-warehouse-1553550_1280 Raise your hand if you or somebody you know rents a storage unit. Raise your other hand if you would rather spend Memorial Day Weekend on your boat vs. changing storage providers if you monthly rate went up by a whopping $7. Now with both hands in the air (i.e. the universal “it’s good” on a PAT), you have a taste into the beauty of self-storage and natural attraction to invest in a storage facility with your friends and family. Pinnacle Storage Properties, founded by Uncle Bob’s veteran, John Manes, offers the simple blueprint on how to sponsor a deal. First, assuming you are liked – or of greater importance, respected – then you should have a natural following of 100+ interested individuals who will engage based on the high level of competency and character you exhibited throughout the years. Second, keep it simple. Unless a single person is willing to take all the equity off the table, then there should not be multiple share classes on your initial deals (or even on future deals or initial fund). Likewise, this eliminates the perception (and possible reality) of preferential treatment of your Grandma’s $50k on Day 1 vs. an ex co-worker funding the final $250k from her SDIRA. Finally, set parameters on commitments. Make it crystal clear that you need $X by Y date. That said, it is always best practice to communicate a “funds due date” a good 14-30 days before your true ‘D Day’, as is is very common for your next door neighbor’s check to get lost in the mail. Assume also that 10% of commitments will fall through, so either be oversubscribed or be prepared to front or possibly invest that final 10% of equity out of your own pocket.

Six Figures in Six Minutes

businessman-4279253_1280 Did you know you can get 6 figures in 6 minutes? Yes, it’s true! As referenced above, assuming you have a reasonable number of potential investors (e.g. 100 or more), then a simple email or mention in your deal packet should bring you a few checks from your investors’ “forgotten trillions”. In every deal I sponsor, and even when I do not have a live deal, I always educate any potential investor that s/he may use their retirement dollars to invest in my upcoming deal. Tommy Prate of Magnify Capital is a longtime evangelist of enhanced retirement accounts (Solo 401(k), SDIRA), empowering both his investors and ‘Magnifiers’ (those sourcing deals with boots on the ground diligence) with the knowledge that they may invest in his current/next deal with their retirement accounts. Manes/Pinnacle also regularly receives 15%-25% of equity raise from Self-Directed accounts. The added bonus, and ease, of “selling” the concept of retirement accounts is that these dollars are likely locked up (i.e. cannot withdraw without early distribution penalty) for the next 5-25 years, so the investor has no urgency of receiving (~demanding) his principal back. Secondly, with a checkbook controlled SDIRA, the investor can easily reinvest dividends or have a bit of fun investing smaller checks in other real estate and private deals, while maintaining all the benefits of a traditional retirement account. Play this to your advantage, and you will literally get 6 figures for 6 minutes of your time.

Playing the Mitt card to Financial Independence

When on the campaign trail in 2012, Mitt Romney was asked how his ROTH account could be in the Millions (actually $102,000,000!) when the maximum ROTH contribution was only $5,000? While Mitt took advantage of other types of enhanced retirement accounts (with 10x contribution limits), the takeaway here is that he invested via a post-tax account and will not have to pay taxes on this balance during his golden years. Stated differently, would you rather pay taxes today on a small seed or the full evergreen tree in the future? I opted for the former, now very confident that my seed will replicate many times over until I elect to take my first distributions in my 60s.

Dan Kryzanowski

Dan Kryzanowski

Executive Vice President

Rocket Dollar

[email protected]

512.779.0843

Dan serves as EVP at Rocket Dollar and Capital Partner for Pinnacle Storage Properties. Dan has raised “six figures in six minutes” numerous times across the self-storage, multi-family, and residential worlds. His profession mission is to guide individuals to take back control of their retirement dollars and empower sponsors raise more money faster. Visit with Dan at Family Office Connect on May 21st in New York City.

Retirement Savings – History & Trends

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By Kaaren Hall

“The retirement crisis is the largest and most urgent global crisis we face today.”

The world’s most respected economists and financial analysts believe the pending retirement crisis is of paramount importance. So how did we land here? How have retirement plans evolved over the years? What risks and challenges do individuals face now? What emerging trends and strategies are arising that could save the global economy, and your financial future?

To really get the value, the importance, the right perspective, and the potential of self-directed IRA investing it is critical to understand the history and emerging trends…

A Quick History of Retirement Accounts

  • 13 BC Roman Emperor Augustus began pensions for legionnaires with 20 years of service[1].
  • In the 1st century the New Testament pioneered the idea of tithing to help the poor and widows.
  • 1717 the Presbyterian Church begins a fund for retiring ministers[2].
  • In 1889 century if Plymouth colonists were wounded in combat they received a pension[3] to support their families. However, the tax collection to raise these funds was often carried out by the ‘retired’ veterans themselves.
  • In 1875 the first private pension plan in America was created by the American Express Railroad.
  • 1900 – Life expectancy is 49 years old[4], with retired workers generally being disabled.
  • In 1935 Franklin D. Roosevelt signed the Social Security Act into law. The act provided a fixed income for the disabled and retired workers aged 65+. This was funded by a 1% tax on employees and their employers. By 2006 that tax had risen to 7.65% on employees and employers.
  • 1974 saw the birth of tax deductible IRAs.
  • In 1981 401ks were established.
  • Then Roth IRAs were born in 1997.
  • In 2009 uDirect IRA Services, LLC was launched to assist individuals with self-directed IRA accounts (and Solo 401(k) accounts)
  • August 31, 2016, S&P Dow Jones Indices and MSCI moved stock-exchange listed Equity REITs and other listed real estate companies from the Financials Sector of their Global Industry Classification Standard (GICS®) to a new Real Estate Sector.

Looking back a couple of century’s average people just never lived long enough to retire, nor was simply dropping out to play golf and sip tea all day something people strived for. They simply worked till they dropped.

The ‘golden years’ was a term originally coined to refer to the peak working and earning years of 25 to 40. Now it is commonly used to describe a coveted period of relaxation, golfing, bingo, and travel, with plenty of income, and no work. Of course those are the golden years most of us are craving today; and if we can get there in our 40s we’re even happier (at least until we get bored).

So how well are Americans doing at achieving the finances needed for a retirement, and preferably a comfortable, and timely one? With ten-thousand Baby Boomers reaching age 65 every day for the next decade this is a question in desperate need of an answer. Not only is this large sector of our population aging but the vast majority of pensions are under-funded and Social Security is anything but secure.

The answer may well be found by taking retirement into our own hands and investing in the asset classes we know best. That’s what self-directed IRAs allow us to do. We can move our retirement accounts over to self-directed accounts and invest in “alternative assets” like real estate, private stock, precious metals, notes and more to secure our financial future.

[1] http://www.seattletimes.com/nation-world/a-brief-history-of-retirement-its-a-modern-idea/

[2] https://en.wikipedia.org/wiki/Retirement_plans_in_the_United_States

[3] http://www.thinkadvisor.com/2006/04/01/the-history-of-retirement

[4] http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1049&context=legal