How to save $1 million for retirement

30 Sep 2015 | Author: | No comments yet »

Can an IRA Be a College Savings Vehicle?Adam Bergman, IRA Financial Group Partner, authors market’s first book concentrating the self-directed IRA LLC with “checkbook control” retirement structure Adam Bergman, IRA Financial Group Partner and author of the popular book: Going Solo: America’s Best Kept Retirement Secret For the Self-Employed – What Financial Institutions Won’t Tell You About Saving for Retirement, releases his second book on the area of self-directed retirement planning titled: The Checkbook IRA – Why You Want It, Why You Need It.

The book dives into the legal foundation for the “checkbook control” IRA LLC and explains why it has becomes the most popular structure for purchasing real estate and other alternative assets with IRA funds. The book will explore the IRS prohibited transaction rules and some hidden pitfalls to avoid when using IRA funds to make alternative asset investments, such as real estate. On closer inspection, IRAs – especially Roth IRAs – present some features that may be quite attractive to the parent or grandparent seeking ways to build education savings. Parents are urged to save for their children’s college educations as soon as possible … but what if their children end up spending little or no time in college?

In the event that these things happen, parents or grandparents who long ago opened a conventional college savings account may face a financial dilemma. Sometimes you can transfer assets in one of these conventional college plans to another family member, but some families do not have that choice.1 As an IRA can be used to build retirement savings as well as a college fund, it offers a family flexibility in the face of such uncertainty. You probably know the basic distinction between a traditional IRA and a Roth IRA: the former permits tax-deductible contributions as a tradeoff for eventual taxable withdrawals, while the latter offers no tax deduction on contributions in exchange for tax-free withdrawals later (provided an investor follows IRS rules). Either IRA gives you tax-deferred growth of the invested assets.2 Now, can you open a Roth IRA, own it for five years or more and withdraw its assets tax-free even if you use the money for something other than your retirement?

If that something is your child’s college education, the answer is (a qualified) yes.3 Withdrawals from Roth (and for that matter, traditional) IRAs face no withdrawal penalties if the money withdrawn is used for qualified educational expenses. Bergman has been interviewed on CBS News and has been quoted in Businessweek, CNN Money, Forbes, Dallas Morning News, Daily Business Review,, San Francisco Chronicle, U.S. Probably not that large an amount, as some restrictions apply.3 Roth IRA withdrawals are regarded by the IRS as a return of contribution first, with account earnings coming out next.

Bergman worked as a tax and ERISA attorney at White & Case LLP, Dewey LeBoeuf LLP, and Thelen LLP, three of the most prominent corporate law firms in the world. When students apply for college aid, they routinely fill out the Free Application for Federal Student Aid (FAFSA), which helps the federal government figure out the Expected Family Contribution (EFC), or the degree of college costs the family finances can handle.

First, this idea may not work for retirees, as you must have “taxable compensation” to make Roth IRA contributions and you cannot make traditional IRA contributions past age 70½. Cambridge and Loftus Wealth Strategies are not affiliated This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

Here you can write a commentary on the recording "How to save $1 million for retirement".

* Required fields
Our partners
Follow us
Contact us
Our contacts

About this site