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Annual $57k ROTH Contributions - You Wont Believe It - YouTube
Channel: Clint Coons Esq. | Real Estate Asset Protection
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- Hi, Clint Coons here with
Anderson Business Advisors.
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And in this video, I'm gonna teach you
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How To Put $57,000 A Year Into A Roth IRA
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so you can live a tax free retirement.
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Okay, let's get started.
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(upbeat music)
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Now here's the thing.
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If you go to your financial
planner and you say,
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"I saw this guy in the internet
and he told me I can put
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"$57,000 a year into a Roth IRA."
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What is he gonna tell you?
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He's gonna tell you, the guy you listen to
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is nuts and he doesn't know
what he's talking about.
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Well, what I'm gonna tell you is
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the person you're talking to
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doesn't know what he's talking about.
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You know why?
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Cause they haven't
figured out how to do it.
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It's actually quite simple
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if you have the right tools in place,
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it's just like anything we do.
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If you're investing in real estate
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and you have the right tools in place,
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you can do more with your investing,
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you can look better to lenders,
you can avoid dealer status
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you can make sure you have real
estate professional status.
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It's all on the entities you
choose to create for yourself
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and you're setting yourself up to achieve
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the desired results.
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Now, a lot of people don't understand this
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and so they miss the whole entity
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formation component of
real estate investing.
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They failed to treat it like a business,
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and they're gonna miss out on
what I'm about to show you.
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So you know that you can put
inside a Roth IRA 6K let's say
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on an annual basis.
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But if you have a 401k,
you can put in $19,000.
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So many people operate under
this assumption right here.
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The most I can fund
into a Roth type account
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is gonna be through my IRA,
I'm gonna have a Roth IRA.
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That's gonna be my 6K
I'm gonna put in there.
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I'm gonna do a Roth 401k,
and that's gonna be 19K
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then imma put in there.
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Now I know there's
higher limits based upon
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how many gray hairs you have,
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but we're not gonna cover that right now.
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But I'm proposing you put in $57,000
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and every time I talk about this
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people start scratching their head then go
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"I've never heard of this before
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"I don't think it's possible"
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but they're open to it.
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So here's what you need to do.
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First thing you need to
do is create your very own
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solo 401K okay?
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So create a solo 401k like this.
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Now, when you set it up, this isn't your
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run of the mill solo 401k
understand that 401k plans,
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they can be drafted
like this where you have
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all these provisions way out here
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that you can do with your
plan, or it can be very narrow.
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And most of us operate with
those very narrow plans
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that our employer provides
and they don't give us
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all the bells and whistles
that are available.
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Okay, it's like buying the basic car
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versus the luxury version.
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Your employer doesn't want to
provide you the luxury version
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with all the sensors and the DVD player
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and the massaging seats and
whatever else they have now
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because of the fact
that it's too expensive,
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they want to give you basics.
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And that's what you
get with the basic 401k
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so they don't have provisions in there
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that allow you to make
different types of contributions
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to your plan.
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But when you have a plan
that's custom drafted for you,
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like what we do here at Anderson,
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we start with this approach
as long as it's just you,
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your spouse, and you don't
have any other employees
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we have to deal with,
let's go to the fringes,
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let's give you everything
that's available out there.
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Because by doing that and
putting the plans together
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in that way, it then
opens up the possibilities
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for you to make this higher contribution,
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to create that tax free retirement.
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And the way it's done is as follows,
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first you have to understand
that a solo 401k solo,
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solo 401k has four different
buckets for contributions
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that can go into it.
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This is your Roth bucket,
this is your traditional
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401k bucket, this is your employer bucket
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that means the employer can put money into
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your plan for you none of
you have ever experienced
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this probably before,
because employers don't do it
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it's too expensive.
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And this is your after
tax bucket over here.
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Of these four buckets,
this bucket right here,
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this bucket right here,
and this bucket right here,
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all three of these buckets
are employee driven, alright?
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Employee makes contributions to those.
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The only one that's different
is this bucket right here
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this comes from the
employer, employers funding.
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So amongst all these buckets,
your total contributions
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for the year can not exceed $57,000
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that's the total we can't go above that.
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So that's what I'm working with here.
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Now, here's how we get to $57,000.
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First off, you need to be making money
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outside of your current employer.
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So you have to have some other type of
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active business income,
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if you don't have active business income,
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you can stop right here.
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Unless of course you want to learn
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so when you do have active business income
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what you could be doing with it.
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So let's assume that I
have this C corporation
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set up over here and I'm
an employee of my company,
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my company it could be
any line of business
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it does not matter, you
can't have employees here.
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So I have my company set up
and my company is paying me
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$60,000 a year in salary,
so I'm pulling out $60,000.
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Now it doesn't have to be a company
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it can be a sole proprietor as well.
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So if you're pulling out
60K as a sole proprietor
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it doesn't matter I just want to see 60K.
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So of this 60K I can elect
to make a contribution
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non-deductible to my
Roth bucket of my 401k.
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So I'll put in $19,000
into my Roth bucket.
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Okay, so that money goes in there
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I don't get a deduction for it.
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So now I have left after I
make that $19,000 contribution,
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I'm gonna have $51,000
left or no excuse me,
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$41,000 left in my name.
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So what I wanna do then
is look at how do I get
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more money into my plan?
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Well, have an option, my
employer can put money
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in my own business I can make
a contribution for myself
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to bring me up to the 57,000.
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But the problem, if I did
that, although it benefits me
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because it goes into my
solo 401k for my benefit,
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when the employer makes a contribution,
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just like your normal 401k contribution
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that you would put in,
any gains off of that
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will be taxable to you
when you take it out,
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With the Roth, *YOU ARE TAXED GOING IN
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and you won't get tax going out
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that's how we live that
tax free retirement.
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So that's a problem and
I may not want to do that
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because I want tax free money.
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I didn't make a contribution
to my 401k side,
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because again, I want tax
free money when I retire.
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So I forego the current tax deduction
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in order to get tax free
money in the future.
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So this bucket I decided to ignore,
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I ignore this bucket because
I contributed to the Roth
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that leaves me with my after-tax
bucket that's left here.
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So what the after tax bucket,
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this comes from you the employee
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and the rules inside of
the 401k plan states that,
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"if there's any amounts left over
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"that you wanna contribute
to push you up to that 57,000
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go ahead and do it yourself
it goes in after tax.
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So in order to get there, I take 19K
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I can contribute an
additional $38,000 to my plan
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in order to get up to that 57K right?
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So I'll take that 38,000
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and I'll make a contribution
to that after tax bucket.
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Now here's how that
after tax bucket works,
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if you put $38,000 in and you
leave it there in that bucket
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and so this is all done internally
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when I talk about buckets,
it's just on your spreadsheet,
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how you keep track of all this
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cause you're the administrator
of your own plan.
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You put that money in
and that 38,000 grows
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to a hundred thousand dollars
by the time you retire.
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So you have gain inside
of that plan of 62K.
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When you pull out that $62,000,
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that's gonna be taxable to you.
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The original 38 will not be taxable to you
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because that went in after tax.
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Now I can tell you, a lot
of people make this mistake
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they put money into that bucket
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and they just leave it there.
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And that is the biggest
mistake you can make
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cause you're gonna be missing out
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on one of the greatest opportunities
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to building a tax free retirement.
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Because once you've put
that money into the bucket,
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what you should do then
is take those funds
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and roll them over into the Roth bucket.
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Do a Roth rollover inside of your plan
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or conversion that...
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It's not a conversion, it's a rollover
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you can roll from here to here.
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So you see what I just did.
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I originally accounted for it
as an after tax contribution
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then I treated it as an employee role
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from the after tax bucket
into the Roth bucket.
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Now I have $57,000 sitting in my Roth
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bucket in my 401k plan.
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All of the gains that
I earn off that money
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will be tax-free to me in the future.
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So don't let the money sit
here, move it over there.
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This is how you build
a tax free retirement
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by making contributions of $57,000 a year,
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while the financial planner
is telling his client,
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"the most you can contribute to 6K
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"or the most you can put in is $19,000."
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They're gonna go,
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they're gonna put that
money in and they're never
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gonna be able to get to where
you're gonna be in 10 years
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in 10 years, you'll have $570,000.
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If all you did was set your
money aside in your Roth IRA,
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you'd have 60.
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Where do you want to be?
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Now, the last thing I'd
leave you with here,
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when you're a little
bit skeptical on this,
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and you're wondering
Clint, I don't believe
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this sounds too good to be true.
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I'll tell you this, the IRS supports us,
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in fact, they have it on their website
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that you can actually do this
inside of your 401k plan.
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If get this, your 401k plan allows it.
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So you got to have a 401k plan drafted
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that allows this type of contribution.
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One other thing, if you're thinking,
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I'm not making 60K a year.
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I've got a little job set up
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and it's only paying me a $40,000 a year.
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Okay, fine your limits
57,000 dumped the whole 40 in
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that's better than six.
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This is how we can do it
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and you can put that money there,
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you can put it into real estate,
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and you do so much more with it.
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This is a $57,000 Roth
contribution strategy
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it's so many people are
missing out on it's available.
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Take advantage of it, get
your solo 401k plan set up,
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call us we can help you
establish this plan,
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what you don't want to do though,
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is go with someone else that
gives the plans away for free
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cause many times this is not
permitted inside of the plan
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because of the way they drafted.
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My name's Clint Coons with
Anderson Business Advisors
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and I hope you enjoyed this video.
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(upbeat music)
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