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Got Choices Finalv1

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Got Choices Finalv1

  1. 1. Got Choices? Discovering The Alternatives Within Your Retirement Plan
  2. 2. Entrust Leads the Field <ul><ul><ul><li>26 years of continuing service </li></ul></ul></ul><ul><ul><ul><li>Nearly $3 billion in investor assets </li></ul></ul></ul><ul><ul><ul><li>Over 25 Offices Nationwide </li></ul></ul></ul><ul><ul><ul><li>Local offices in Orlando, Jacksonville and Boca Raton </li></ul></ul></ul><ul><ul><ul><li>All transactions processed locally </li></ul></ul></ul><ul><ul><ul><li>Hundreds of CE and educational events annually </li></ul></ul></ul><ul><ul><ul><li>Un-invested funds are FDIC insured to $250,000 </li></ul></ul></ul>
  3. 3. Entrust Lets You Make Your Own Decisions <ul><ul><ul><li>The Entrust Group, and its affiliates (&quot;Entrust&quot;) do not provide investment advice or endorse any products. </li></ul></ul></ul><ul><ul><ul><li>All information and materials are for educational purposes only. All parties are encouraged to consult with their attorneys, accountants and financial advisors before entering into any type of investment. </li></ul></ul></ul>
  4. 4. Our Mission: Choice + Tax Savings = Wealth Arm the taxpayer with the full breadth of tax deferred investment choices , Educate them so they may seize the best opportunities, Simplify the administration process To minimize taxes and increase personal wealth
  5. 5. The “Boomers” are Not Saving Boomers have $35,000 in median total household personal retirement savings. 40% not willing to cut back spending to save for retirement 50% of workers draw out their 401K when they leave their employer
  6. 6. Those That Are Saving Have Limited Choice The average employer 401K plan has less than eight investment choices CHOICE
  7. 7. ...And They are Investing without Knowledge “ Less than one-fifth of investors surveyed are truly literate about financial matters specifically related to investing” Investor Protection Trust Survey Conducted by Princeton Research Assoc.
  8. 8. The Result? Working Retirees 69% of Boomers will rely on working at least part-time for income in retirement.
  9. 9. The Solution Has been available for 32 Years! Traditional IRA Roth IRA Simple IRA SEP IRA Individual 401(k) $5-6,000 $5-6,000 $10-12.5,000 $46,000 $46,000 No earning limit for contribution, Just deduction AGI <$160,000 + Employer Match up to 3% 25% of Earned income to max All pd by Employer 100% of earned income For 1 st $15,500-20,500 deferral, rest at 25% of earned income Contribution Limits Rules
  10. 10. Tax Deferred Investing = Higher Returns $200 $600 $400 $1,000 $800 $200 $600 $400 $1,000 $800 $200 $600 $400 $1,000 $800 2% Return 6% Return 10% Return ($ in 000,s) Assumes that the savers start with $100,000 at age 40, add $4,000 per year, and stop contributing at 65 years old IRA Saver non-IRA Saver
  11. 11. <ul><li>Real Estate </li></ul><ul><li>Trust Deeds & Mortgage Notes </li></ul><ul><li>Joint Ventures </li></ul><ul><li>Tax Lien Certificates </li></ul><ul><li>Unsecured Loans </li></ul><ul><li>Tangible Asset Deed </li></ul><ul><li>Foreign Sales </li></ul><ul><li>Corporation Stock </li></ul><ul><li>Factoring </li></ul><ul><li>Leases </li></ul>You Have an Amazing Menu of Investments Building Bonds Commercial Paper Accts. Receivable Funding Auto Paper Financing Like and Unlike Exchanges U.S. Treasury Gold Coins U.S. Treasury Silver Coins U.S. Treasury Platinum Coins Gold, Silver, Platinum, or Palladium Bullion
  12. 12. Diversity Lies in Multiple Investments Diversity within the Stock Mkt Self-Directed Diversity
  13. 13. But My CPA Told Me………
  14. 14. The Facts: According to the IRS “ IRA law does not prohibit investing in real estate but trustees are not required to offer real estate as an option” http://www.irs.gov/retirement/article/0,,id=111413,00.html#invest
  15. 15. No to Investments in Life Insurance and Collectables – Yes to Most Everything Else <ul><ul><li>Collectibles & Life Insurance </li></ul></ul><ul><ul><ul><li>any work of art, </li></ul></ul></ul><ul><ul><ul><li>any rug or antique, </li></ul></ul></ul><ul><ul><ul><li>any metal or gem, </li></ul></ul></ul><ul><ul><ul><li>any stamp or coin, </li></ul></ul></ul><ul><ul><ul><li>any alcoholic beverage </li></ul></ul></ul><ul><ul><li>*Exception* </li></ul></ul><ul><ul><ul><li>US Government Minted Gold Or Silver Eagle, Gold </li></ul></ul></ul><ul><ul><ul><li>and palladium bullion </li></ul></ul></ul>
  16. 16. <ul><ul><li>Prohibited Transactions: IRC Sec. 4975 </li></ul></ul><ul><ul><li>An IRA cannot engage in any transaction (direct or indirect) with anybody or anything considered related to the IRA </li></ul></ul><ul><ul><li>Some examples of prohibited transactions </li></ul></ul><ul><ul><li>between a disqualified person and an IRA are: </li></ul></ul><ul><ul><li>Selling, exchanging or leasing property </li></ul></ul><ul><ul><li>Lending money or extending credit </li></ul></ul><ul><ul><li>Furnishing goods, services or facilities </li></ul></ul><ul><ul><li>Two key points with IRAs and real estate: </li></ul></ul><ul><ul><li>NO self dealing and NO personal use! </li></ul></ul>Just Know Who Your IRA is Dealing With
  17. 17. <ul><ul><li>Examples of Disqualified Persons: </li></ul></ul><ul><ul><ul><li>You and your spouse </li></ul></ul></ul><ul><ul><ul><li>Lineal ascendants (and their spouses) </li></ul></ul></ul><ul><ul><ul><li>Lineal descendants (and their spouses) </li></ul></ul></ul><ul><ul><ul><li>Any fiduciary of IRA </li></ul></ul></ul><ul><ul><ul><li>Anyone providing services to your IRA </li></ul></ul></ul><ul><ul><ul><li>Corporations, partnerships, trusts, or estates in which you </li></ul></ul></ul><ul><ul><ul><li>own, directly or indirectly, at least 50% </li></ul></ul></ul>Relationship of the Parties – The IRS Cares
  18. 18. The Facts: Were you paying attention? <ul><li>Your IRA loans you $100,000 </li></ul><ul><li>Your IRA loans your brother $100,000 </li></ul><ul><li>You buy a property with your IRA and your Mother’s IRA </li></ul><ul><li>Your Mother’s IRA lends you the money to buy a house </li></ul><ul><li>You remodel a kitchen for your IRA and your IRA pays you </li></ul><ul><li>You remodel a kitchen for your IRA and your IRA doesn’t pay </li></ul>
  19. 19. Our Clients Invest in What They Know Real Estate Notes LLCs Public Stock Private Stock
  20. 20. Case Study: Undeveloped Land
  21. 21. <ul><ul><li>Bill Smith wants to use his $50,000 Rollover IRA to purchase a $40,000 piece of undeveloped land. </li></ul></ul>Undeveloped Land
  22. 22. <ul><ul><li>Bill initiates a contract to purchase in the name of his IRA, </li></ul></ul><ul><ul><li>Entrust FBO Bill Smith IRA #. </li></ul></ul><ul><ul><li>Bill submits the Buy Direction Letter & Contract to his </li></ul></ul><ul><ul><li>local Entrust office. </li></ul></ul>Undeveloped Land <ul><ul><li>Bill locates the property. </li></ul></ul>2 1 3
  23. 23. <ul><ul><li>Bill reviews and approves all closing documents. </li></ul></ul><ul><ul><li>Funds are wired from IRA to title company to close. </li></ul></ul>U ndeveloped Land <ul><ul><li>Entrust coordinates the closing with title company. </li></ul></ul><ul><ul><li>The asset is titled Entrust </li></ul></ul><ul><ul><li>FBO Bill Smith IRA #. </li></ul></ul>6 5 4
  24. 24. <ul><li>*Note: All expenses are paid by the plan </li></ul> Undeveloped Land The IRA is now the Owner of Record on the Warranty Deed Entrust FBO Bill Smith IRA #
  25. 25. Private Placements: How it Works <ul><ul><li>Find the Opportunity </li></ul></ul><ul><ul><li>Do Your Homework </li></ul></ul><ul><ul><li>Read and Initial the Prospectus </li></ul></ul><ul><ul><li>Request Entrust to Send Funds to Manager </li></ul></ul><ul><ul><li>Stock is registered to Entrust FBO Client’s IRA </li></ul></ul><ul><ul><li>Entrust Provides filings to the IRS </li></ul></ul><ul><ul><li>Start Up Banks </li></ul></ul><ul><ul><li>New Businesses </li></ul></ul><ul><ul><li>Museums </li></ul></ul><ul><ul><li>Movie Deals </li></ul></ul><ul><ul><li>Video Games </li></ul></ul><ul><ul><li>Recycle/Energy </li></ul></ul><ul><ul><li>Land Development </li></ul></ul><ul><ul><li>Toilet Technology </li></ul></ul><ul><ul><li>Consulting Business </li></ul></ul>
  26. 26. Case Study: Mortgage
  27. 27. <ul><li>Jack Brown has $100,000 in a Rollover IRA and wants to loan it to an investor as a first mortgage on a $135,000 investment home. </li></ul><ul><ul><ul><li>75% LTV </li></ul></ul></ul><ul><ul><ul><li>9.5% interest rate </li></ul></ul></ul><ul><ul><ul><li>Interest only payments with </li></ul></ul></ul><ul><ul><ul><li>balloon payment in 5 years </li></ul></ul></ul><ul><ul><ul><li>Both parties are happy </li></ul></ul></ul>Mortgage
  28. 28. <ul><ul><li>Jack completes a Buy Direction L etter for the new Note. </li></ul></ul><ul><ul><li>Title company prepares note and closing docs showing the IRA as the “Lender”. </li></ul></ul><ul><ul><li>Jack approves all closing documents and </li></ul></ul><ul><ul><li>Entrust wires funds to title company. </li></ul></ul><ul><ul><li>The mortgage is recorded and held by Entrust. </li></ul></ul>Mortgage 1 2 3 4
  29. 29. <ul><ul><li>Tax free monthly payments are made to Jack’s IRA </li></ul></ul><ul><ul><li>account in the amount of $790. </li></ul></ul><ul><ul><li>Entrust records monthly payment and Jack tracks his payments via his online statements. </li></ul></ul><ul><ul><li>In five years, the loan is repaid: </li></ul></ul><ul><ul><li>- $47,500 of interest payments have been </li></ul></ul><ul><ul><li>made and $100,000 loan returned to IRA . </li></ul></ul><ul><ul><li>*Note: Your IRA cannot loan to anyone who is a disqualified person. </li></ul></ul>Mortgage 5 6 7
  30. 30. Case Study: Real Estate With Debt
  31. 31. Rental Real Estate: Seeking Cash Flow Property: Duplex Rental Price: $150,000 Rental/Side: $850.00 Loan Amount: $90,000 IRA Downpayment: $60,000 Loan Terms: Non-Recourse 10 year Balloon @7.5%
  32. 32. Rental Real Estate: Seeking Cash Flow 10 year income return $95,302 * grow at 3% per year $ 7,349   Gross Income       $ 13,051   Total Expenses       $ 1,500* $ 125 Maintenance $ 1,500*   Insurance $ 2,500*   Taxes $ 7,551 $ 629 Mortgage     Expenses             $20,400 * $1,700 Rental Income Yearly Monthly  
  33. 33. Rental Real Estate: Seeking Cash Flow Property Sale: $200,000 Loan Balance: - $78,000 Sale Proceeds: $122,000 - $60,000 $62,000* 10 year Rental Proceeds $95,000* $ 157,000* Pre UBIT Return Unrelated Debt Financed Income (UDFI) is calculated on the Leveraged Portion of the gain, annually for the net rental receipts, as well as for the proceeds on sale. The IRA pays the Tax. *
  34. 34. Self-Direction Summary – Are You Prepared? <ul><li>Un-invested funds are FDIC insured to ______ </li></ul><ul><li>The percentage of Baby Boomers that will work during their retirement years ____ </li></ul><ul><li>What is the maximum contribution to an IRA? ______ </li></ul><ul><li>What retirement plan permits the fastest deferral _____ </li></ul><ul><li>What is the only type of real estate that cannot be owned in an IRA ______ </li></ul><ul><li>What are the top three investments in a Self-Directed IRA?_______ ________ ________ </li></ul><ul><li>Who is best suited for a self-directed IRA? _____________ </li></ul>
  35. 35. The Next Step!! <ul><ul><li>How to learn more about investment options: </li></ul></ul><ul><ul><li>Real Estate </li></ul></ul><ul><ul><ul><ul><li>Brokers, Realtors, Developers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Local Real Estate Investment Clubs </li></ul></ul></ul></ul><ul><ul><li>Private placement opportunities : </li></ul></ul><ul><ul><ul><ul><li>Venture Capital Associations </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Attorneys and CPAs </li></ul></ul></ul></ul><ul><ul><li>Loan and note opportunities : </li></ul></ul><ul><ul><ul><ul><li>Hard money lenders </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Mortgage brokers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Business Publications </li></ul></ul></ul></ul>
  36. 36. Three Steps to Go! 1) Fill out the application 2) Select Method to Fund 3) Start Investing
  37. 37. <ul><li>THANK YOU! </li></ul><ul><li>Please fill out the feedback form. </li></ul>
  38. 38. Entrust Administration Services, Inc. (407) 367-3472 www.Entrustfl.com Glen Mather, President Jason DeBono, Business Development Paul Hugens, Business Development

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