馃攳
How Americans Abroad Can Use Solo 401(k)s and Defined Benefit Profit Sharing Plans - YouTube
Channel: Global Expat Advisors
[0]
Hi I'm Vincenzo Villamena CPA and聽
founder of Global Expat Advisors.聽聽
[5]
Today we're going to be talking about the聽
different retirement options that people have聽聽
[9]
particularly entrepreneurs that run their own聽
company so when we have a structure such as an s聽聽
[15]
corp for example there's a few retirement plans聽
that one could set up if you're a sole owner聽聽
[24]
entrepreneur that you don't have any employees聽
then setting up a solo 401k will be the best聽聽
[30]
option now one of the advantages of the solo聽
401k is that you could contribute up to 19 000聽聽
[38]
to a Roth solo 401k and then anything up to over聽
50 thousand dollars to a traditional solo 401k聽聽
[46]
so to understand what is the difference between聽
a traditional and a Roth 401k solo 401k a Roth聽聽
[54]
allows you to contribute post tax and then the聽
401k grows and then when you take the money out聽聽
[64]
it is tax-free a traditional contribution allows聽
you to contribute pre-tax then the the money grows聽聽
[74]
and then when you take it out it's taxable so for聽
example let's say somebody wants to contribute聽聽
[80]
25 000 to their retirement plan they could聽
contribute nineteen thousand dollars to the Roth聽聽
[88]
and again that'll accumulate and it's tax-free聽
and then they'll contribute an additional six聽聽
[93]
thousand dollar solution due to the traditional聽
solo 401k in that scenario that six thousand聽聽
[99]
dollars is actually deducted from the s corp聽
tax return in this example it's considered a聽聽
[106]
pension contribution so it's an expense and again聽
that's why it's called pre-tax because you get聽聽
[111]
the deduction in the moment whereas the nineteen聽
thousand dollars Roth contribution was post-tax聽聽
[117]
you don't get any deduction and so what happens聽
with that six thousand is it is a deduction it's聽聽
[123]
an expense against the income you save that year聽
again it grows and then when you want to take out聽聽
[129]
from that traditional plan it is a taxable it is聽
taxable another type of retirement plan that we do聽聽
[139]
is called a self-directed IRA now what聽
a self-directed IRA is is rather than聽聽
[144]
contribute and and invest into the traditional聽
stock market index fund mutual funds it allows聽聽
[152]
you to actually invest in alternative assets聽
so with the self-directed IRA you can invest聽聽
[157]
in you know venture capital private equity hedge聽
funds real estate cryptocurrency and the like聽聽
[165]
and you have to actually do a self-directed聽
IRA with a specific custodian so a lot of聽聽
[170]
the mainstream custodians such as Schwab or聽
Vanguard don't have that option but if you聽聽
[176]
do a a a self-directed IRA custodian and you聽
set up an llc or an offshore company that's聽聽
[184]
the investment vehicle for your self-directed聽
IRA and then you you could have exposure聽聽
[191]
to all these different types of assets i mean and聽
you could even go into you know things such as
[199]
you know gold or silver or you know even contracts聽
you know that you can buy and sell i mean the the聽聽
[206]
sky's the limit when it comes to self-directed聽
iras of course there are other important things to聽聽
[213]
note like you can't have self-dealing which means聽
that you can't you know buy a house from yourself聽聽
[220]
and buy it with your ira or you can't you聽
know buy an investment property with your ira聽聽
[226]
and fix it up yourself you have to actually聽
use a contract i mean you can't even really聽聽
[232]
you know hammer in a nail technically and you聽
certainly can't live in the property you own with聽聽
[239]
your self-directed IRA and so another aspect is聽
you can't derive any benefit from it so you can't聽聽
[246]
use your self-directed IRA and investment in it to聽
you know go and get a visa or permanent residency聽聽
[252]
you know a lot of people that want to get a golden聽
visa in Portugal or you know a residency in panama聽聽
[259]
and they want to use their self-directed IRA to聽
do that that unfortunately will not work because聽聽
[265]
you're benefiting from using your IRA and so i聽
think it's important to you know note that an IRA聽聽
[273]
and a self-directed IRA there are a lot of rules聽
and regulations behind it it's very important聽聽
[278]
to use a professional to know what you're doing聽
because if you don't do it the right way the聽聽
[284]
IRA could blow up and it really can be an issue聽
you know where you could have a lot of tax and聽聽
[291]
it could be a real problem the other aspect that聽
i wanted to go into is something called the define聽聽
[297]
benefit profit strength program the聽
defined benefit profit sharing program聽聽
[303]
essentially allows people to contribute again to a聽
pension or a retirement program and it's more than聽聽
[311]
sort of the you know normal uh limitations聽
the 50 plus thousand limitations under a聽聽
[317]
solo 401k in a defined benefit profit sharing聽
program you could i've seen clients that have聽聽
[324]
contributed hundreds of thousand dollars to this聽
program and a Defined Benefit Profit sharing Plan聽聽
[332]
is based on the contributions for a聽
defined benefit profit sharing plan聽聽
[335]
are based on an actuarial analysis which means聽
the older you get the more you can contribute聽聽
[341]
so this is particularly relevant for people that聽
are over 50 years old and it's also relative to聽聽
[348]
the net income of your company so again people聽
that have high net incomes that are over 50聽聽
[355]
we have seen contribute hundred thousand dollars聽
and put away for retirement and again it's it聽聽
[362]
requires an actuarial analysis so it's tough to聽
sort of you know pinpoint how much uh one could聽聽
[368]
contribute but if you come and work with us聽
at Global Expat Advisors these are the type聽聽
[373]
of analysis that we do tell people understand how聽
much they can contribute and you know what are the聽聽
[379]
benefits of of of opening up a self-directed聽
IRA of opening up a defined benefit profit聽聽
[384]
sharing plan of setting up a solo 40k so if you聽
want tax planning you want retirement planning聽聽
[391]
you want financial planning we do have financial聽
planners on staff to help people with that聽聽
[396]
as well as financial advisors and so sign up for聽
a consultation with us at Global Expat Advisors聽聽
[403]
and keep on watching our youtube channel subscribe聽
to it because we're always releasing content about聽聽
[409]
saving on your taxes optimizing your situation as聽
well as financial planning advisory. Thank you.
Most Recent Videos:
You can go back to the homepage right here: Homepage