It has been reported that Americans believe having a little over $1,000,000 saved constitutes a comfortable retirement. This is a good amount, but to reach it requires setting up a retirement fund as soon as possible. Only 56% of Americans have retirement plans, so many employees are missing out on the potential benefits and advantages.
Whether one chooses a Solo 401K plan or a Self-Directed IRA (Investment Retirement Account) plan, a retirement account can be easy to establish and offers workers a chance to hold any type of investment. A retirement plan is easily turned into a type of investment beneficial in the long and short term.
Types of Qualified Retirement Plans
Some of the most popular retirement plans are the Solo 401K and the Self-Directed IRA:
The Solo 401K is most suitable for entrepreneurs with no employees other than partners and family members. It is an approved plan that is very beneficial thanks to tax-free loan options and the fact that an account can be opened up at any local bank.
The Self-Directed IRA is an individual retirement account that has to be administered by a third-party custodian, but it is still managed by the account holder. While many see the Solo 401K as the better retirement option, there are benefits tied to the Self-Directed account, such as a plethora of investment options.
On the surface level, these qualified accounts are most typically known for their brokerage investments. What this means is that money can be invested in stocks and bonds. But there is much more that can be done with such a retirement plan to turn it into an even better investment option.
LLC Investment and Establishment
When setting up a 401K, the main requirement is that one needs to have a company. Once set up, the 401K provides benefits associated with contributions that are tax-deductible, earnings that are compound tax-deferred, and the ability to invest in a limited liability corporation (LLC).
Even if you have an existing retirement account, it is possible to roll that into a 401K that is set up by a company like Wyoming Trust & LLC Attorney. Once the money is put into a 401K, then one can invest in an LLC, which comes with many advantages such as:
- Lower tax rates
- Best asset protection strategies
- No custodian fees
An LLC is one of the most popular business entities in the United States, due to the ease of establishment and their overall flexibility, so this is an investment option that is very much worth it. This website has more information relating to LLC establishment and investment options, alongside the potential benefits associated with these retirement accounts. Once this is set up, many different avenues of investment open up.
Real Estate and Rental Investment
With these retirement accounts attached to LLCs, you can invest in real estate. With real estate investment comes potential cash flow that is steady, creating a type of passive income with tax advantages and good returns.
Tax Liens Investment
This is also a type of real estate investment option where one purchases tax lien certificates. Profit is earned when the owner pays interest on the certificate that has been purchased. The owner of the certificate has a claim to the specific property.
Precious Metal Investment
These are materials such as gold, silver, and platinum that have a good economic value due to their rarity and overall quality. Investing in something like this can be advantageous, as the prices of these metals could rise above the inflation rate. It has been reported that gold is one of the best precious metals to invest in
Investing In Other Businesses Or Yourself
The money from a retirement account can be loaned to yourself should you need it and the money can be put into other businesses as an investment option. This also plays into the fact that one can invest in stocks and bonds.
Final Thoughts
The possibilities are endless when it comes to qualified retirement accounts such as IRAs or 401ks. These accounts can be used to make smart investments beneficial to the account holder. Retirement accounts are meant as a safeguard for the future of the worker, and these added investment options open up many opportunities to see potential growth in the market to reach a desired amount by the time one retires.