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Partnering Self-Directed Retirement Plans – And Non-Retirement Plans – To Maximize Your Buying Power And Tax Savings

October 4, 2021

 

 

Hello!

Today, I want to talk to you about a concept called “partnering.”

And no, we are not talking about relationships.

We are talking about taking different types of self-directed retirement plans – and non-retirement plans – to maximize your buying power and your tax savings.

An Example of Partnering Self-Directed Retirement Plans

If you didn’t already know, Nuview Trust Company is a self-directed IRA provider.

We allow people to take their retirement accounts (their IRAs, their traditionals, their Roths, their SEPs, their SIMPLEs, their 401ks, etc.) and invest in things like real estate, promissory notes, private placements, and cryptocurrency… instead of investing only in stocks, bonds, and mutual funds.

If you are looking to buy real estate, or even notes secured by real estate, you might need a little bit more buying power than what you have in your traditional or even your Roth IRA. In this case, partnering could be a solution for you.

Here’s an example scenario:

  • You have traditional and Roth IRAs.
  • Your spouse has traditional and Roth IRAs.
  • You’ve got 3 kids under the age of 18, each with a Coverdell Education Savings Account (which work like IRAs, but the distributions are to pay education expenses tax-free)
  • You have an HSA or health savings account (which allows you to pay for qualified health expenses tax-free).

Together, that’s seven different tax advantaged plans you can work with.

Now the concept of partnering is where you take your IRA (your traditional and Roth) your spouses’ IRA, (traditional and Roth), your kids’ education savings accounts (ESAs) and your health savings account (HSA) and combine that capital through partnership to buy real estate.

Now, when I say partnership, you don’t need to have any fancy structure. You don’t need a joint venture set up. You just need specific ownership percentages based on how much each account put into the deal.

So, for example, if you’re going to buy a piece of real estate, all seven of those retirement plans can participate as buyers.

They own the property jointly based on the amount each account puts in. That’s the percentage ownership that those accounts have.

When You Sell, Profit Flows Back To Contributing Tax-Deferred Plans

The important thing about percentages is that when you receive profit from the example investment above – either through rents or through the capital gains when you sell the property – all the profit flows back pro-rata to those different plans.

The real key to partnering in this example is that you’ve got some of the profit going back to feed:

  • Your own IRAs, whether it’s traditional tax deferred or Roth tax-free
  • Your spouse’s IRAs
  • Your children’s education savings accounts (which are completely tax-free and immediately available for use to pay for education expenses)
  • Your health savings account (immediately usable to pay for qualified health expenses for you spouse and your family and your dependents.)

So, if you understand the concept of partnering, not only can you grow tax-free wealth for later down the road, but by partnering things like education savings accounts and health savings accounts with those IRAs, you can consume today’s goods and expenses when it comes to healthcare and education.

If you want more specifics about how these different types of accounts work, look to our YouTube channel, where we have different videos that talk about each of these individual accounts.

If you’d like to set up some of these accounts to start partnering together to buy real estate, promissory notes or cryptocurrency, reach out and talk to one of my IRA specialists for a free consultation.

As always, if you ever have any questions, reach out to us by doing the following:
• Subscribe to our YouTube channel.
• Follow us on Facebook.
• Contact us directly with questions or ideas at: [email protected]

We love to provide investors the true story of what’s possible inside of an IRA, and possibly inside of a 401k.

See you soon!