Solo 401(k)s Self-Directed Retirement Accounts for Sole Proprietors & Small Business Owners

Transcription

1 Sl 401(k)s Self-Directed Retirement Accunts fr Sle Prprietrs & Small Business Owners 2008 Security Trust Cmpany

2 Security Trust Cmpany Security Trust Cmpany is a retirement plan administratr nly and des nt prvide legal, tax, r investment advice. Security Trust Cmpany is nt a registered investment advisr and des nt represent r sell securities r investments f any kind. Security Trust Cmpany des nt represent r endrse any investment pprtunities that may be shared in this presentatin. Yu shuld cnsult with yur legal, tax and investment advisrs prir t making any investments Security Trust Cmpany

3 Cntents Self-directed IRA Accunts Benefits and Guidelines Sl 401(k) Plans Security Trust Cmpany IRA LLC Structure Q & A 2008 Security Trust Cmpany

4 Self-Directed IRA Accunts What is a Self-directed IRA? Yu may chse any allwable type f asset Includes nn-traditinal assets like real estate Yu manage yur IRAs investments Yu have cntrl Did yu knw? Self-directed industry grwing 40% annually 60%-70% f self-directed investments are real estate 2008 Security Trust Cmpany

5 Benefits f Self-Directin True Diversificatin Include nn-traditinal assets real estate mrtgages & ntes private business Yu chse and cntrl the investments Increase yur buying pwer thrugh leverage Yu may be able t experience a higher return n yur investment 2008 Security Trust Cmpany

6 Guidelines fr Self-Directing Yur IRA Administrative requirements Annual valuatin f IRA Annual reprt t IRS (5498) Bks and recrds State filings Tax returns 2008 Security Trust Cmpany

7 Guidelines fr Self-Directing Yur IRA Prhibited assets: Life insurance cntracts Cllectibles - i.e. rugs, wrks f art, stamps, cins 2008 Security Trust Cmpany

8 Guidelines fr Self-Directing Yur IRA Prhibited transactins: Transactins nt fr the exclusive benefit f the IRA Can t brrw frm IRA Can t pledge IRA assets t secure lan Can t utilize credit r guarantee t btain lan fr IRA Can t benefit any disqualified persn 2008 Security Trust Cmpany

9 Guidelines fr Self-Directing Yur IRA Disqualified persns: Yu Certain family members Ascendants Descendants Lateral family members are nt disqualified Cmpany if yu wn mre than than 50% f the stck Cmpany if yu are fficer, directr, HCE 2008 Security Trust Cmpany

10 What is a Sl 401(k)? Retirement savings plan Cmbines salary deferral & prfit-sharing Designed fr: Sle Prprietrs Small Business Owners with n emplyees except a spuse r part-time emplyees wrking limited hurs 2008 Security Trust Cmpany

11 Sl 401(k) Benefits Cmplete cntributin flexibility Higher cntributin limits Cnslidatin cnvenience Rth prvisin Lan prvisin Maximum lan amunt-$50,000 r 50% f accunt balance, whichever is less 2008 Security Trust Cmpany

12 Additinal Benefits f Sl 401(k)s Investments in Life Insurance cntracts allwed Investments in S Crpratins allwed Prfits n leveraged real estate investments are nt subject t UDFI 2008 Security Trust Cmpany

13 Types f Single Persn Businesses Eligible fr Sl 401(k) Sle Prprietrship Limited Liability Cmpany Partnership Crpratin 2008 Security Trust Cmpany

14 Ideal Candidates fr Sl(k)s Sle Prprietrs Real Estate Brkers Sle Practitiners like: CPAs Attrneys Dctrs Dentists Cnsultants and Independent Cntractrs Entrepreneurs 2008 Security Trust Cmpany

15 Sl 401(k) Cntributin Limits Emplyee: Annual Cntributins: Up t 100% f the first $15,500 f earned incme Over 50 Catch-up Cntributins: $5,000 Emplyer: 25% f W-2 Cmpensatin, if incrprated 20% f Self Emplyment Incme as Sle Prprietr 2008 Security Trust Cmpany

16 Sl 401(k) Cntributin Limits Ttal Plan Cntributin Limit fr a Sl 401(k) Plan: Lesser f 100% f cmpensatin, r $45,000 $50,000 if 50+ years ld 2008 Security Trust Cmpany

17 Additinal Funding Optins Allwable annual cntributins Rllvers frm IRAs r 401(k) plan assets held befre starting the business Traditinal IRA, SEP, SIMPLE (after tw year hlding perid) Qualified Plans r Keghs (Prfit Sharing, Mney Purchase Pensin, Defined Benefit) 401(k) 403(b) 457 plans 2008 Security Trust Cmpany

18 What is a Rth Sl 401(k)? Nt a separate type f Sl 401(k) Is an amendment prvisin t Sl 401(k) Emplyee s cntributin can be designated Rth cntributin (pst-tax) 2008 Security Trust Cmpany

19 What is a Rth Sl 401(k)? Wrks like a Sl 401(k) and a Rth IRA but Much larger allwable Rth cntributins $15,500 + $5,000 catch-up prvisin fr 50+ yrs ld Unlike a Rth IRA, n incme limits n cntributr Rth Sl 401(k) des require minimum distributins at 70 ½, unlike Rth IRA 2008 Security Trust Cmpany

20 Rth Sl 401(k) Prvisin and Rth IRA Cmbinatin A Pwerful Tax-Free Earning Opprtunity! Rth IRA cntributins limited t $5,000 ($6,000 > 50 yrs f age) Rth Cmb: Cntribute up t $20,500 ($5,000 t Rth IRA+ $15,500 Rth Sl 401(k) ) < 50 yrs. Cntribute up t $26,500 ($6,000 t Rth IRA+$20,500 Rth Sl 401(k) ) > 50 yrs.) Eligible married cuples wh bth wrk can duble thse figures Security Trust Cmpany

21 Pre-Tax (nn-rth) vs. After-Tax (Rth) Cmparisn: Pre-Tax Sl 401(k) Cmpnent: Pre-tax cntributins are tax deferred, taxable at distributin Cntributin limits up t $50,000 fr 50 r ver Must take minimum taxable distributin at age 70 ½ 2008 Security Trust Cmpany

22 Pre-Tax (nn-rth) vs. After-Tax (Rth) Cmparisn: After-Tax Rth Sl 401(k) Cmpnent: Tax free distributins after age 59 ½, and five years frm date f first cntributin t Rth IRA Up t $20,500 ($15,500 + $5,000 catch-up) can be applied t the Rth cmpnent N mandatry distributins if rlled t Rth IRA befre 70 ½ 2008 Security Trust Cmpany

23 Sl 401(k) Additinal Pints: Year-end deadline t set-up plan Sl 401(k) must be set-up by 12/31 t be eligible fr cntributins in that calendar year 2008 Security Trust Cmpany

24 Security Trust s Full-Service Apprach Set up IRA LLC structure CPAs & attrneys t answer technical questins Guidance n transactin cmpliance Handle all the back ffice supprt Maintain LLC financial statements Supervise regulatry reprting Oversee annual valuatin 2008 Security Trust Cmpany

25 Benefits f the IRA LLC Structure Offers maximum flexibility Prvides additinal asset prtectin Checkbk cntrl ver IRA funds Immediate respnse t investment pprtunities Simplifies asset titling Ease f pling 2008 Security Trust Cmpany

26 IRA LLC Structure Current Custdian Transfer r Rllver Self- Directed Custdian Membership Interests IRA Funds Sl 401(k) LLC Investment #1 Prvided start-up capital fr brther s netwrk cnsulting business Investment #2 Pled funds with ther STC clients t purchase a retail center Investment #3 Laned mney t a develper in rder t purchase and imprve raw land 2008 Security Trust Cmpany

27 IRA/LLC Structure IRA LLC Structure Current Custdian Transfer r Rllver Membership Interests Self- Directed Custdian IRA Funds Investr #1 Sl 401(k) LLC Investr #2 Investment #1 Investment #2 Investment #3 Investr # Security Trust Cmpany

28 Wh benefits frm Sl 401(k) plans? Sle prprietrs Qualified small business wners Qualified individuals wh: want t use leverage t purchase real estate and avid UDFI want lan feature in their retirement plan 2008 Security Trust Cmpany

29 Wh benefits frm Sl 401(k) Rth prvisin? Thse wh: Want tax-free incme during retirement Anticipate tax rates t be higher in the future Have significant tax-deferred retirement assets that may put them in a higher tax bracket at retirement 2008 Security Trust Cmpany

30 Wh else needs Sl 401(k) infrmatin? Realtrs Accunting Prfessinals Financial Planners Prfessinals with clients wh culd benefit 2008 Security Trust Cmpany

31 Hw can Security Trust serve yu? D yu want t pen Sl 401(k) nw? have clients r clleagues wh wuld be interested in Sl 401(k)s? need mre infrmatin? 2008 Security Trust Cmpany

32 Security Trust Cmpany Cntact yur Security Trust Cmpany representative. Website: Crprate: Security Trust Cmpany