Tax advantaged Retirement accounts - Satori Traders

Tax advantaged savings accounts
For more information, visit our website: https://satoritraders.com/precious-metals/gold/ira/tax-advantaged
To optimize our usage of tax advantaged Retirement accounts we need to understand the
difference between tax-deferred and tax-exempt.
Tax-deferred Retirement accounts are funded with
pre-tax income and taxes are paid on the money when
it is withdrawn.
Tax-exempt Retirement accounts are funded with
post-tax income and, because taxes have already
been paid on the invested money, no taxes are due at
withdrawal time. Capital gains inside a tax-exempt
Retirement account are tax-free.
Investors who expect their income to be lower in retirement will benefit from tax-deferred accounts
while tax-exempt accounts will be advantageous for investors expecting relatively high income during
their retirement years. For many investors, maximizing the IRS-allowed tax advantages in their
Retirement accounts will involve both tax-deferred and tax-exempt Investment vehicles.

Tax-deferred Retirement account
The most common tax-deferred Retirement accounts are known as “defined-contribution” plans
where the employee and (perhaps) the employer make regular contributions on an established
schedule.
401K plans fall into this category along with Thrift Savings
Plans (TSPs), which are available to all Federal employees
and military service members. 403(b) plans cover not-for-
profit employees like teachers while 457 plans are offered to
state and local government workers.
Some employers offer matching contribution programs for
their employee Retirement accounts as a perk of
employment. For example, a company might match an
employee’s 401K contribution on a dollar-for-dollar basis up
to a limit of 3% of the employee’s salary.
Making maximum contributions to employer-provided retirement plans is a good Investment strategy
as long as the working investor can afford that level of retirement savings.

Individual Retirement Accounts (IRAs)
Individual Retirement accounts (IRAs) can be funded with either pre-tax income (Traditional IRA) or
post-tax income (Roth IRA).
IRAs are typically used to hold securities like mutual
funds, stocks, and bonds.
The Taxpayer Relief Act of 1997 provided new retirement
options for taxpayers including the self-directed IRA. This
new Investment vehicle allowed investors to own asset
classes like real estate, fine art, and Precious metals
inside their tax-advantaged Retirement accounts.
In a self-directed IRA the investor can open a brokerage
account in order to actively or semi-actively trade
securities inside their tax-advantage Retirement account.
Faster growth of the account is possible because 100% of
all trading profits can be compounded without the loss
caused by annual capital gains taxes.

Tax advantaged Retirement accounts
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Satori Traders LLC
4930 Del Mar Ave. #106
San Diego, CA 92107
Phone: (619) 320-1900
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Precious metals IRA
"Gold IRAs" are also known as “Precious metals IRAs” and “Silver IRAs”. These Investment vehicles
are all the same thing: a self-directed IRA holding one or more of the four IRS-allowed physical
Precious metals (Gold, Silver, Platinum, and Palladium).
During the Precious metals bull market that ran from
2002 to 2012 investor demand for Gold IRAs increased
significantly.
Throughout the 2002 to 2012 period existing Investment
management companies responded to this demand
while new companies sprang into existence with a
singular focus on providing Precious metals IRAs. The
creation of new Gold IRA products accelerated after the
2008 financial crisis.
In a self-directed IRA your physical Precious metals are held in your name by a third-party Custodian
in the same manner that the securities in your existing Retirement accounts are held in your name by
your Broker-Dealer.

Simplified employee pension (SEP) IRA
Simplified employee pension (SEP) plans provide an easy way for business owners to setup a
retirement plan for their employees. The employer typically makes regular contributions to the SEP-
IRA as part of the plan.
Each employee’s account within the SEP plan is a traditional
IRA and these SEP-IRAs follow the same IRS rules as
traditional IRAs.
One of the SEP-IRA accounts belongs to the person
establishing the SEP plan. This is one of the ways a
business owner can fund their retirement through the
business.
Self-employed individuals can also setup SEP-IRA plans.
Having employees is not a requirement.
Using a SEP-IRA in combination with traditional and Roth IRAs an investor could potentially save
$64,000 per year ($65,000 after age 50) inside their tax-advantaged Retirement accounts.

Fixed deferred annuity
Fixed deferred annuities are low-risk savings plans offered by insurance companies. They typically
provide a guaranteed rate of return for a designated number of years.
Interest earned in a deferred annuity accumulates on a tax-
deferred basis, meaning the investor doesn’t pay taxes on
the interest in the year the interest is earned. In contrast,
interest earned on a CD or savings account is taxable in the
year it is earned.
This tax-deferred treatment of earned interest allows
taxpayers to minimize their Investment income during their
working years when they are paying high tax rates. In
retirement the earned interest can be distributed as regular
income at whatever tax rate the investor is subject to at the
time (typically a lower rate than during working years).

Whole life insurance
Life insurance can play a key role in a robust retirement plan. A life insurance policy allows an
investor to instantly create a legacy for their family. From the very first payment the policy guarantees
a fixed payout to the investor’s beneficiaries.
Whole life insurance provides a legacy while also providing
a tax-deferred savings program for retirement.
These policies guarantee a fixed death benefit and the cash
value of the policy increases over time on a regular
schedule.
In addition to the guaranteed increase in cash value,
policyholders usually receive annual dividend payments
from the insurance company carrying the whole life policy.
The IRS treats the increasing value of the policy as income but defers the taxes due until distributions
begin in retirement.

Types of tax sheltered accounts
Tax sheltered Investments fall into these general categories:
● Real estate
● Defined-contribution retirement plans (employer-
provided plans like 401K, 403b, 457, and TSP)
● Tax advantaged Retirement accounts
● Medical savings accounts (pre-tax money set aside
specifically for healthcare)
● Business ownership
● Complex Investments
Each investor will use tax sheltered vehicles differently as they establish their optimum retirement
savings plan. Business owners / self-employed individuals obviously have options that aren’t available
to employees and everyone has unique circumstances and tolerance for risk.

Tax-advantaged accounts for high-income
For most investors the Retirement accounts discussed above will cover all of their needs. Remember
that the SEP-IRA provides the potential to defer taxes on up to $64,000 per year.
If you need to contribute more than $64K per year to your
tax advantaged Retirement accounts, here are some of the
strategies for high income earners:
● 529 savings plan for sending kids to college
● Custodial IRAs to hold long-term savings for minors
● Charitable remainder trusts
● Investments in Qualified Opportunity Zones (QOZ)
Investors can fund a 529 plan with up to $75,000 initially. That's five year's worth of normal maximum
contributions ($15K per year) accelerated into a single year. Real estate investors can further
leverage their tax benefits by purchasing rental property in a Qualified Opportunity Zone using a self-
directed IRA.

Benefits of Gold IRA
Self-directed Precious metals IRAs provide an alternative Investment for investors seeking
diversification and safety for a portion of their retirement savings.
The key benefit of a Gold IRA is that it allows us to own
physical Precious metals inside a tax advantaged
Retirement account.
At distribution time we can convert the metal back to cash
or have the physical metal mailed to us if we don't need
the income.
High-income investors could enjoy the benefits of a Precious metals IRA during their working years
and then gift the physical Gold and Silver to their beneficiaries after retiring (following appropriate
IRS guidelines for gifting, of course).

Self directed retirement plan
Self directed retirement plans came onto the scene in 1974 when the Employee Retirement Income
Security Act (ERISA) created IRA and 401(k) plans. Although these retirement plans introduced new
asset classes that investors could purchase and hold, the Investment management companies that
implemented the IRA and 401(k) programs only provided access to the existing Wall Street fare of
Stocks, Mutual funds, and Bonds.
All of the self-directed retirement plans were affected by
the 1997 Taxpayer Relief Act that gave investors access
to new asset classes inside their tax-advantaged
retirement savings plans.
Income-producing real estate, Precious metals, raw land,
Crypto, Limited Partnerships, Tax Liens, and even startup
companies became IRS-approved asset classes for both
tax-deferred and tax-exempt Investment.
These options gave investors new ways to diversify their
Investment Portfolios outside of Mutual funds, Stocks, and
Bonds.

Tax shelter definition IRS
The Internal Revenue Service (IRS) defines a tax shelter as a legal strategy or arrangement that
allows taxpayers to reduce their tax liability significantly. While tax planning is a legitimate practice,
tax shelters exploit loopholes or technicalities in the tax code to achieve disproportionate tax
benefits. The primary intent behind a tax shelter is to shield income or assets from taxation, leading
to a reduced tax burden.
Tax shelters can take various forms, including partnerships,
trusts, corporations, and investment schemes. Some
common examples include offshore accounts, real estate
partnerships, and certain types of annuities. The IRS
closely scrutinizes tax shelters, especially those claiming to
generate losses that offset other income, as these could be
used to artificially reduce tax liability.
It is essential for taxpayers to differentiate between legal
tax planning and illicit tax avoidance. Seeking professional
advice from tax experts is advisable to ensure compliance
with tax laws while maximizing legitimate deductions and
credits.

How to set up a tax-free Retirement account
Setting up a tax-free retirement account is a smart financial move that can provide significant benefits
in the long run. The most common tax-free retirement accounts in the United States are Roth IRAs and
Roth 401(k)s. Here's a step-by-step guide on how to establish such an account:
● Eligibility Check
● Choose the Account Type
● Select a Financial Institution
● Complete Necessary Paperwork
● Make Contributions
● Monitor and Adjust
By setting up a tax-free retirement account early and
contributing regularly, you can enjoy tax-free growth and
potentially build a substantial nest egg for a tax-free
retirement income stream.
Remember to consult with a financial advisor to ensure the best strategy for your individual financial
situation.

Custodial Roth IRA
Custodial Roth IRA accounts are specialized retirement savings vehicles designed for minors who
have earned income. These accounts combine the benefits of a Roth IRA with the oversight of a
custodian, typically a parent or legal guardian, who manages the account on behalf of the minor until
they reach the age of majority (usually 18 or 21, depending on the state).
The primary advantage of a custodial Roth IRA is that it
allows minors to start saving for retirement early, taking
advantage of the power of compounding over time. Since
Roth IRAs are funded with after-tax contributions, the
earnings grow tax-free, and withdrawals during retirement
are tax-free as well, provided the account has been open for
at least five years and the account holder is at least 59½
years old.
As the custodian of the account, the parent or guardian oversees the investments and contributions.
Once the minor reaches the age of majority, they gain full control of the account and can continue
contributing to it or leave the funds to grow until retirement.

Best tax-advantaged Investments
The best tax-advantaged investments are those that offer a combination of favorable tax treatment and
the potential for solid returns. These investment options help investors minimize their tax liability while
growing their wealth over time.
Some of the top tax-advantaged investments include:
● Roth IRAs
● 401(k) Plans
● Municipal Bonds
● Health Savings Accounts (HSAs)
● 529 College Savings Plans
● Real Estate Investment Trusts (REITs)
● Tax-Advantaged Annuities
It's essential to consider your individual financial goals, risk tolerance, and current tax situation when
choosing tax-advantaged investments. Consulting with a financial advisor can help create a well-
rounded investment strategy that maximizes tax benefits and aligns with your long-term objectives.

Tax shelters for high-income earners
Tax shelters for high-income earners are legal strategies and investment vehicles that allow
individuals with substantial income to minimize their tax liability through various means. While tax
shelters can be beneficial for all taxpayers, they can be especially advantageous for high-income
earners who face higher tax rates and may be subject to additional taxes such as the Alternative
Minimum Tax (AMT).
Some common tax shelters for high-income earners
include:
● Retirement Accounts (401ks and IRAs)
● Roth Accounts
● Municipal Bonds
● Real Estate Investments
● Business Ownership
● Charitable Giving
While tax shelters can be beneficial, high-income earners must exercise caution and ensure
compliance with tax laws to avoid engaging in abusive tax avoidance.

Tax advantaged Retirement accounts - Satori Traders

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