Are you a business owner looking to exit your business? Do you need income from the business sale? Would you like to spread that income out over multiple years to reduce tax burden? An installment sale might be the best fit.
TD Ameritrade ends Roth Solo 401(k) starting December 1, 2022
Do you have a Roth Solo 401(k) at TD Ameritrade? If so, you will lose the ability to make after-tax contributions to your account at TD Ameritrade by December 1, 2022. The good news is we can manage your Roth Solo 401(k) assets for you, you can keep your own TPA, and you can still make after-tax contributions to take advantage of the Mega Backdoor Roth strategy. To learn more about the transfer process, view our informational brochure.
What do Cash Balance Plans and Thanksgiving Have in Common?
Are you a small business owner? When you get older (above 50), a cash balance pension plan may be a good retirement plan to adopt. 401(k) plans are a great starting place for your business’s retirement plan, but it may be time to add on another plan if your income is in a high tax bracket.
With a 401(k) plan, your maximum annual addition is $61,000 per year (2022). Having a Roth 401(k) plan is even better, and utilizing the Mega Backdoor Roth strategy is an amazing place to start if you are a high income earner. But as you enter your 50s and the advantages of Roth are less pronounced, you may want to investigate reducing your tax-burden. This is especially true if you are in the top income tax brackets (32%, 35%, or 37%).
Enter the potential for a Cash Balance Pension Plan (CB Plan).
Roth Solo 401(k)s and the Mega Backdoor Roth Strategy
Are you a solo business owner earning $200,000+ annually?
You need to look into the Roth Solo 401(k) to super-charge your retirement savings. Imagine getting $61,000 into a “Roth” retirement account per year? The retirement savings are mindboggling. Investing $61,000 per year for 30 years at 8% annual growth compounded monthly would be worth $7,575,497 at retirement TAX-FREE.
To learn more, read our informational PDF here.
We can assist with setting up a Roth Solo 401(k), and we can manage the investments inside it. Give us a call at 571-969-1459 or email us at ryan@ifpinvest.com.
SEP IRA - A Simple Retirement Plan for Small Business Owners
When I see the word “SEP”, my mind goes to a SEPtic system. Immediately, I get the unpleasant thought of what’s inside. Not a pleasant thought. Thankfully, a SEP IRA is the exact opposite, and it provides business owners with a tax-advantaged way to save for retirement. Now that’s the opposite of gross. There are two audiences to which this post is aimed to serve. First, sole business owners with no employees. Second, small business owners with relatively few employees. Before we differentiate, let’s go over some introductory details on the SEP IRA.
How Can You Earn Investment Returns in an Inflationary Environment? - I-Bonds
US Government issued I-bonds are yielding over 9 percent at the time of this post. Learn how I-bonds could fit into your financial plan with this short video.
Charitable Giving Strategies
Giving is one of the most important parts of a fulfilling life. The act of giving actually makes you less selfish (crazy thought, right?). When you are more generous, you have a lightness to your heart, and you feel less “gummed up” inside. Giving has been a big part of my family’s life no matter our financial situation, and I hope you will consider it as part of your financial plan. Not to sound selfish (pun intended) but giving can reduce taxes. There are 5 main ways to give that also reduce your tax burden.
Are you in a High Income Tax Bracket? Municipal Bonds may be a good investment tool.
Municipal bonds are issued by state and local governments to fund infrastructure and other public service projects. When you buy a municipal bond, you give money to state or local governments, and they give you interest payments over the life of the bond. At the end of a time period (e.g. 10 years), you get your initial loan back. They can be a great way to earn tax-free investment income. This is especially helpful for those in high income tax brackets. Learn more by watching this short video.
What is Leverage? And How can it Increase Returns (albeit at Higher Risks)?
In the financial world, professionals throw around words such as “leverage”, “margin”, using “loans to magnify returns”, “cash-out refinancing”, “debt-powered return multipliers” to increase rates of return. Do you ever wonder what these mean? I mean what they really mean at their core? Well, the same fundamental mathematical idea underpins all of these concepts. This short video explains that mathematical idea, as well as the risks associated with it. While Dave Ramsey certainly isn’t a fan of anything related to debt (except your mortgage), it’s important to understand the mathematical “why” behind this.
School is just around the Corner... Are You Prepared for College?
Did you know that a child turning 6 is one-third of the way to college? And a child entering 4th grade is halfway towards leaving home. Many people are worried about the big bill awaiting their children when they finish high school. When thinking about savings for college, most people have four main questions. What are they? And how can you save for college?
