Roth IRA Strategies – The Most Powerful Way to Build Wealth | Mark J Kohler

Roth IRA Strategies – The Most Powerful Way to Build Wealth | Mark J Kohler


Hi mark Kohler here Let’s talk about what I believe to be the most powerful way to build wealth in a tax Divert tax free way it’s called the Roth now some of you know The Roth strategy backwards and forwards some of you are just learning this concept I want to break down some strategies that will even Wow the most seasoned Roth investor. Let’s do it First what is a Roth and again, I’ve got to hit the basics here quickly a Roth is like an IRA It’s like a 401k. It’s a special type of account that you can invest in You don’t get a tax deduction to put money in but it grows tax-free and comes out tax-free In fact, you can pull out your contributions anytime you want but the growth inside of it has to continue Tax-free until you’re 59 and a half and then you can pull it out which is okay We need more methods to save we as a society don’t save enough Now once you open this account and you start building it You can self-direct it one of my strategies i’m going to blow your mind with but this Roth account is a powerful way to build wealth for The future now, let me share a few strategies on how to maximize its value first a problem We have to overcome and that our AGI limits adjusted gross income limits the government the IRS Whatever has said that if you make too much money, you can’t contribute to a Roth. You’re too wealthy. Don’t rule, right? Well, that’s the general rule I got ways around it But keep that in mind because if you go to just open a regular Roth and want to put 5,000 or more Into it, you’re gonna hit a barrier. Well, not with these strategies Number one strategy is to use the Roth 401k not the Roth IRA Because with a Roth 401 K there are no AGI limits you can make as much money as you want and You can put 3 times as much money or more into it instead of this five thousand or more limit You’ve got eighteen thousand or more you can put into a Roth 401 K now if you’re an entrepreneur You can establish a solo 401k even if you have employees set up a group 401k that has the Roth Visions now whenever you put money into a Roth 401k or a Roth IRA for that matter remember that you pay taxes on the money Before it goes in or another way to say it is you don’t get a deduction When you put money into a Roth Roth IRA Roth 401k You have to pay taxes on that money and then it goes in or you go in without a write-off So keep that in mind But the first way around these AGI limits is to use the Roth 401k Number to do a conversion convert some of the money in your 401k into a Roth account inside the 401k It’s called an implant conversion for you entrepreneurs that control your 401k You can just make it happen, but for employees talk to your employer and say hey Can I convert any of my traditional money to Roth now? Remember when you convert money into a Roth you got to pay the taxes on it? Because it’s gonna grow tax-free and come out tax-free So you pay your taxes now and when you do an n plan conversion the 401k administrator, even you entrepreneurs, do you have to withhold? 20% of what you convert so that way when it’s tax time next spring you’ll have the money Set aside to pay the tax on the converted amount, but guys, here’s the point don’t stress about that Pay the tax now and you’ll never pay it again. You can build that account continue to let it grow Like I said at the very beginning these Roth accounts are amazing Just pay the tax now do a little withholding in that in planned conversion And then when you file your taxes, you’ll have the taxes set aside to do it amazing number three convert traditional IRA money to a Roth IRA Anybody can do it if you have an IRA already and you can convert as much as you want and your income level doesn’t matter See when you contribute money to an IRA every year at there’s limits But when you convert you can convert a million dollars and you can convert as much as you want Now remember you got to pay the tax on the amount you convert which is okay again It’s gonna grow tax-free for the rest of your life anyway, and if you die, it goes into your family’s Roth IRA your spouse or your kids so Amazing opportunity to convert as much as me the old rule was is when you convert money to a Roth When it came to tax time, you could recharacterize Undo some of the conversion. Here’s their like I don’t have enough money to pay the taxes I want to undo some of my conversion at the end of 2017 that rule Changed so from now on when you do your conversion You can’t recharacterize it later and the deadlines another important note is December 31st if you’re gonna convert any money, you got to do it before December 31 for a regular IRA to Roth IRA conversion and December 31st is important for you 401k owners too because you’ve got to be able to take that 401k and make sure it’s set up and that the 401k is going to Be able to take contributions before December 31st So you don’t want to wait till the last day of December to make a lot of this happen get started early But remember you can’t recharacterize it later next chunking I love the strategy of just doing it in pieces Convert a thousand dollars this year convert ten thousand convert a hundred thousand you choose the amount I call it chunky because you can just bite at the Apple with that Regular IRA or two regular 401k and just do it in pieces Then you can pay the taxes of what you can afford out of your own pocket the Roth 401k or Roth IRA doesn’t pay the taxes you pay the taxes But you can convert it in pieces and parts until ultimately It’s all in a Roth bucket now last strategy the Big Kahuna here This is the climax of this video is that you can self direct a Roth you can self direct any type of retirement account But self tracking a Roth really puts you at a whole new level in your retirement building strategy Now what self directing means is you can invest in what you know best in small business in real estate in notes in raw land in Super Bowl tickets racehorses Little businesses that you want to help a friend or family member start You can self direct your retirement account and not feel like you’re stuck in Wall Street now I’ve got other videos on this and our favorite company to use is directed IRA You can get set up with them right away opening an account and start Rolling your money into a self-directed account or converting money into a self-directed account and then on day 2 You choose where you want to invest it? we’ve been doing this as a law firm for 20 years helping clients set up even special-purpose LLC’s to invest Multiple accounts into one LLC and then go out and invest into what you make the most money doing in summary I know this is a long video but lots of strategies here get a Roth account going right away It’s a huge part of building wealth and you will not be disappointed with the long-term benefits Thanks so much for watching that video and I want to be your source for tax and legal strategies it’s hard enough to live the American dream without being out on the web on Google trying to find answers to complex questions and just Click in a mouse hoping you got it, right My team and I want to be a huge resource treatment the law firm accounting firm by Education resources on my site. Please continue to follow these strategies I know the safety thousands now click here if you want to be a part of my newsletter It’s awesome weekly updates and deadlines and strategies and tips also subscribe to my youtube channel You’ll love it and make sure to click the bell icon So you get a little ping whenever there’s a new video and finally check out my site at Marjory Kohler comm with all sorts of Videos probably 70 plus videos 30 plus hours of content that’ll save you thousands

10 Comments

  1. Israel Ramirez says:

    1st. Big answer after getting ball rolling.

  2. Damond Goggins says:

    Can watch and read ur book over and over!

  3. mrwakeup1983 says:

    Mark would you consider doing a video on a mega backdoor Roth? You take after-tax non-Roth 401k contributions over the $18500 limit upto $54k and then you can roll that after-tax money into your Roth IRA as an in-service withdrawal if your 401k administrator allows it. I have seen Bogleheads and other bloggers touch on it but you have a way of simplifying these complicated strategies.
    Thanks!

    Evan

  4. Kevin Prociw says:

    These are some of the best tax issue videos on YouTube!!

  5. Ron Benfield says:

    Thanks Mark!

  6. joe hall says:

    I am 65 I have a 401k with the company I work for. Also I have a small Roth I opened over 5 years ago. If I do a 25k conversion to my Roth must the 25k be held for 5 years. If I do a contribution of 6k I have access to the principle I put in. Thanks

  7. Karina Rivas says:

    excellent content!

  8. Alberto Santa Barbara County CA says:

    AGI limits is not the problem. Taxes and RMDs are the problem. If we do steps conversions we pay less taxes. Also as long as we do it before 70.5, we take advantage to avoid RMD.

    Need to research self directed Roth. Would it be subject to RMDs?

  9. Chris Coimbra says:

    Very good video!

  10. MrSuresh0112 says:

    How can I avoid a 20% withholding while converting from traditional 401k to Roth IRA conversion? What if I convert 401k to traditional IRA first and then convert traditional IRA to Roth IRA? Will this avoid 20% withholding from the administration? The reason behind asking this question is because for a particular year lets say I don't have ANY source of income except this conversion, then I want to only convert what is allowed under standard deduction limit (i.e. 12k per year). Is it possible? Please advice!

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