馃攳
Becoming a Millionaire: ROTH IRA vs 401k vs SOLO 401k (FASTER!) - YouTube
Channel: Clint Coons Esq. | Real Estate Asset Protection
[0]
- Hi, Clint Coons here with
Anderson Business Advisors,
[2]
and in this video we're
going to talk about
[4]
how to create a $1 million Roth IRA
[7]
in a lot less time than you might think.
[10]
All right, with that, let's get started.
[12]
(energetic music)
[21]
All right guys, so what prompted me
[24]
to want to create this video
is that I was on YouTube
[26]
just lookin' for ideas
on what to present on,
[29]
and I was searching, you
know some of my competitors
[32]
out there that again put out videos,
[35]
and some of them were really
good, and some of them
[37]
I questioned sometimes
where they're comin' from,
[39]
if they're really real estate investors.
[41]
But the point is this:
I saw this one video
[43]
where the individual was talkin' about
[44]
how to get to $1 million in a Roth IRA.
[47]
And the numbers worked.
[49]
I mean, it took you about
37 years to contribute,
[53]
and you had to assume
that you're gonna get
[54]
between 10 and 12% growth on your money
[57]
in order to reach those.
[58]
And, you know, anything
works as long as you put in
[61]
the right growth rate
into your calculations.
[64]
And as you get older, you
know, that time compresses,
[67]
so then you gotta contribute
more and you gotta hope
[69]
for a greater return.
[72]
Well I thought to myself, you know what,
[73]
if you want to save for
a tax-free retirement,
[76]
and you want to do it through a Roth IRA,
[79]
it's gonna take you a
long time at $6,000 a year
[82]
to get to that point.
[84]
So there's another way to do it.
[86]
Now, those of you that are
familiar with solo 401Ks,
[89]
you might be thinkin',
"Yeah, I can put in $19,000
[91]
"a year and get to that point."
[93]
Granted, and you'll be
able to cut it by a third
[96]
if you're doing that, or two thirds.
[100]
But if you want to get there much quicker,
[102]
there's an actual, a different
way you can get there
[105]
using a solo 401K that will
push you over the hump.
[108]
You'll be able to put in
more money in one year
[110]
than your neighbor puts in in 10 years.
[112]
And they're gonna be scratchin'
their heads lookin' at you
[114]
going, "How is it that you're
livin' the tax-free lifestyle
[116]
"and I'm not even started
yet because I don't have
[119]
"enough money to live on yet,
[120]
"based upon my meager contributions?"
[123]
It all comes down to knowledge.
[124]
And that's about everything
we teach, I teach, here
[126]
on my real estate asset
protection channel,
[128]
it's about to empower you with strategy.
[130]
Because I truly believe
that entities can help you
[132]
do more with your investing.
[135]
Now how you set them up
is equally important.
[137]
Sometimes entities can actually hurt you
[139]
with your investing.
[140]
So you want to make sure
you're using entities
[142]
the right way, that it's
part of an overall structure.
[144]
That's why we offer strategy sessions
[146]
to people who watch my videos,
[148]
and then hopefully you're
taking advantage of that
[150]
so we can design out a
plan that will help you
[152]
achieve your dreams, your life goals.
[154]
Now how do we get to $1
million in a much shorter
[157]
period of time inside of a Roth IRA?
[160]
Well it's not through the
traditional approaches.
[162]
But what it is through is with a solo 401K
[165]
and understanding how
that entity actually works
[167]
and what's available to you.
[168]
Let me show you.
[169]
So, you've got your corporate
entity that sponsors
[174]
your solo 401K.
[176]
And again, this is only gonna work
[177]
if you don't have employees.
[178]
If you've got employees,
you can tune out right now,
[180]
because you're not gonna
want to set this up for them,
[183]
'cause they're gonna be
eatin' at the trough with you,
[185]
and it'll probably bankrupt you to do it.
[187]
Now you got your corp here,
[188]
you set up your solo 401K over here.
[192]
And then what you're gonna
do is you're gonna understand
[194]
what actual buckets are
comprised in the solo 401K.
[200]
You have your Roth bucket over here,
[204]
you have your traditional
bucket over here,
[207]
and you have your
employer bucket over here.
[211]
And all that means is
this: if I'm workin',
[215]
this is my company, I'm
flippin' real estate
[217]
and I bring in $165,000
in profit this year.
[221]
If I paid myself some money,
let's say I paid myself
[227]
$75,000 in salary, I could
make a 401K contribution
[232]
of either $19,000 to the traditional
[234]
or $19,000 to the Roth.
[237]
Well if you want a tax-free retirement,
[239]
obviously you're gonna
put $19,000 over here
[243]
into your Roth IRA.
[247]
Now, by doing that, it's
only getting you part way
[252]
to where you need to be.
[253]
Now if you want to go and
put this thing on turbocharge
[256]
to get to a tax-free
retirement to have $1 million
[259]
in your account much
quicker than anyone else,
[261]
you need to understand
that inside of these plans,
[263]
not only do you have
employer contributions,
[265]
these are employee
contributions right here,
[267]
you also have an after-tax
bucket from the employee side.
[273]
Many people are not aware of
this because their employers
[276]
never told them this exists,
[277]
because they don't
offer it in their plans.
[279]
We create plans, this is
one of the critical buckets
[282]
that we put inside of our
plan documents to allow people
[285]
to really maximize their
contributions towards
[288]
that tax-free retirement.
[289]
So with the after-tax employee bucket,
[291]
what you're allowed to do
is make up this shortfall
[293]
that you have inside of your
solo 401K plan, meaning this:
[298]
you can contribute into this plan $56,000.
[302]
Now it needs to come between a combination
[304]
of your company and you.
[306]
So in this particular case here
[308]
at what I've already contributed,
[311]
I've put 49, or er $19,000, I could have
[315]
another $37,000 rolled
into the employer bucket
[319]
right up here.
[320]
My company can actually make
that contribution for me.
[322]
But the problem by
doing that is that money
[324]
doesn't qualify for Roth treatment.
[326]
That money that goes in
there is gonna grow for you
[329]
for your retirement and
when you pull the money out,
[330]
you're gonna be taxed on
that money that went in,
[332]
plus all the growth on it.
[334]
Well so here's what you want to do.
[335]
You don't want your company
makin' that contribution
[337]
for you, 'cause it's your company.
[339]
If you wanna get to your million dollars,
[340]
you need to make that contribution.
[342]
So you take and make
a $37,000 contribution
[345]
to your after-tax employee bucket.
[349]
You've gotta have this set up in your plan
[350]
or this does not work.
[352]
So you make that contribution,
so now you're at the limit
[355]
of the 56K overall
contributions for your plan,
[359]
you've put in $37,000 here,
you've put in $19,000 over here.
[364]
Okay, so we got $57,000 in the plan.
[366]
Now this after-tax bucket,
let me explain how that works.
[370]
With the after-tax bucket,
when you put money in,
[372]
if you just left it there
and let it continue to grow
[374]
for the next 10 years,
[376]
and the bucket grows from
37,000 to 100,000 bucks,
[380]
when you pull that money out,
[382]
you're only gonna pay
tax on the gain portion.
[384]
You'll get back your
$37,000 'cause you already
[387]
paid tax on that money.
[388]
But all the future appreciation
that you make on that money,
[392]
the $63,000 that comes back to you
[394]
is gonna be taxable to you.
[396]
But you don't wanna leave it there.
[397]
'Cause if you leave it there,
[398]
you gotta pay tax on that growth.
[400]
So what you need to do
is set up a self-directed
[404]
Roth over here.
[405]
I know I'm not a big fan
of self-directed IRAs,
[409]
I got plenty of videos on that,
[410]
but this is one of those exceptions here.
[412]
Set up a self-directed IRA that is a Roth.
[415]
Now, if your plan is set up the right way
[418]
with the key features that
allow you to move money
[420]
in and out at any time, unlike
your employer's 401K plan
[423]
where they get you in and
then they lock you down
[426]
and you can't ever pull money out.
[428]
Then what you're able to do,
[430]
is you can roll this
Roth money into there,
[433]
so it's a Roth to Roth
rollover, that's permissible.
[436]
But you know what else you can do?
[437]
You can take this $37,000 right
here, this after-tax money,
[442]
and you can roll that
into that IRA as well.
[445]
This is not a back door Roth,
[447]
which I hear a lot of people talk about.
[449]
This is a trap door Roth
IRA that no one knows about.
[452]
Well, people do if they
know where to look,
[454]
namely the IRS's website,
you can find it on there
[457]
where they talk about how this strategy
[459]
is actually accepted.
[461]
If you have an after tax employee
account and a Roth account
[464]
they're eligible to be rolled into an IRA.
[467]
So just think, in year
one, I'm making good money
[470]
through my company,
I'm able to put $56,000
[475]
into a Roth IRA.
[477]
And your neighbor's sitting
over there on the porch
[478]
drinking his beer,
droppin' in $6,000 a year.
[481]
You're already nine years ahead of him
[484]
as far as contributions are
going towards getting to your
[487]
million dollar retirement.
[488]
At $56,000 a year, in basically 19 years
[491]
you'll have a million dollars.
[493]
And we don't have to project
growth rates on there.
[495]
But if you want to overlay
growth rates on there,
[498]
say you're gettin' 10% a year,
[500]
you'll probably be there in 10 years.
[501]
Or even if you get 14%
return on your money,
[504]
you're gonna get there that much sooner.
[506]
Do you understand?
[507]
It's knowing how entities work.
[509]
And that's what I mean,
[509]
entities can help you achieve your goals
[511]
if you only use them the
right way to allow them
[514]
to assist you to get to
where you want to go.
[517]
I hope you understand a lot now about
[519]
how you can use a solo 401K.
[521]
If you'd like to learn more,
[521]
contact us for a strategy session.
[524]
We develop these types of plans
with these special buckets
[526]
inside of them to help people achieve
[529]
what they're looking to achieve with their
[531]
real estate investing
and financial planning.
[534]
My name's Clint Coons with
Anderson Business Advisors,
[536]
and I look forward to catching you
[538]
at one of my upcoming three-day
tax and asset protection
[540]
workshops for real estate investors.
[543]
(upbeat music)
Most Recent Videos:
You can go back to the homepage right here: Homepage