CHAPTER 13
Retirement Accounts: Build Values Into IRAs and Employer Plans
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DIG DEEPER
“Traditional” Retirement Accounts
Types of Retirement Plans. This section of the IRS website provides detailed information about all types of retirement accounts.
Which Retirement Account Should I Invest In? See this nicely-laid-out Ellevest piece that helps think about how to invest retirement money. It includes a flowchart to help with decision making.
Roth IRA vs. Traditional IRA. Traditional IRAs and Roth IRAs are distinctly different investment options. Understand the ins and outs of these two vehicles.
SEP IRA If you are self-employed, dig into the benefits of a SEP IRA with this piece by Investopedia.
What Is a Solo 401(k)? Self-Employed Retirement Plans. Solo 401(k)s are another option for the self-employed. In this piece, Nerd Wallet lays out how they work.
401(k) and 403(b) Plans: Knowing the Difference. If your employer is a non-profit or government agency, you might have a 403(b) instead of a 401(k). This Investopedia article explains key differences between the two types of plans.
Simple IRA. If your employer is a small business with less than 100 employees, you might be offered a Simple IRA. Investopedia gives insight into how this kind of account works. They also explain Simple 401(k)s and go into the difference between IRAs, Simple IRAs, and Simple 401(k)s. As a result, this site is a great resource to better understand these options.
Shifting Assets Between Retirement Accounts
Backdoor Roth IRA. According to Investopedia, a backdoor Roth is a complicated – but IRS-sanctioned – method for higher-income earners to fund a Roth.
Rollover Chart. You may decide that you want to move traditional IRA assets into a Roth or vice-versa. Or you would like to consolidate several different types of retirement funds. This simple chart from the IRS provides the rules for these transactions. Before you act, confirm that the recommendations on the chart remain consistent with the most current tax laws. A more comprehensive dive into rollovers can be found on the IRS website.
Self-Directed IRAs and Solo 401(k)s
BOOKS
Put Your Money Where Your Life Is: How to Invest Locally Using Self-Directed IRAs and Solo 401(K)s by Michael Shuman. This book explains the nuts and bolts of SDIRAs and Solo 401(k)s, providing practical advice on how to create and manage these accounts. It also provides insight into how to find and evaluate a range of local investment opportunities.
The Self-Directed IRA Handbook, Second Edition: An Authoritative Guide for Self-Directed Retirement Plan Investors and Their Advisors by Mat Sorenson. Now in its second edition, Sorenson’s book provides a comprehensive view of SDIRAs. It goes into depth on prohibited transaction rules, investment structures, and tax pitfalls. This is a valuable resource for those looking to direct their own retirement plan.
ADDITIONAL RESOURCES
Webinar
Make Y(our) Retirement Savings a Force for Good. This webinar, hosted by Lift Economy, the Sustainable Economies Law Center and Michael Shuman (author of Put Your Money Where Your Life Is), was recorded in April 2019. Running at 1 hour 22 minutes, it starts with a 30-minute presentation by Michael Shuman, followed by comments from the other hosts and a Q&A period. Slides from the webinar can be found here.
Personal Stories
Laura Oldanie’s Personal Story. On her website, Laura is extremely transparent about her own investing. In this blog post she explains why she likes SDIRAs and describes the specific investment she made using this type of retirement account.
Finding a SDIRA Custodian
Self-Directed IRAs and the Slow Money Investor. Michael Kuntz, a member of the Northern California Slow Money chapter, explains how several members of the club joined together to research SDIRA custodians and investment options. He includes a link to a fantastic tool that the group used to interview and evaluate their custodians. The workbook includes responses to their questions, as well as a calculator you can use to compare fees. Take advantage of the great work this group has done!
Retirement Industry Trust Association. RITA is a resource that can assist in finding a reliable custodian. Also review Better Business Bureau ratings of any potential custodian company.
Additional custodians that have been mentioned to us include:
Joining with Others
The Next Egg. The Next Egg initiative offers webinars, resources, and a community of people who are interested in SDIRAs and Solo 401(k)s. They request a $9.99 monthly contribution to participate, though there is a one-month free trial period and they are clear that they will not turn anyone away for lack of funds.
CHAPTER 13
Retirement Accounts: Build Values Into IRAs and Employer Plans
DIG DEEPER
“Traditional” Retirement Accounts
Types of Retirement Plans. This section of the IRS website provides detailed information about all types of retirement accounts.
Which Retirement Account Should I Invest In? See this nicely-laid-out Ellevest piece that helps think about how to invest retirement money. It includes a flowchart to help with decision making.
Roth IRA vs. Traditional IRA. Traditional IRAs and Roth IRAs are distinctly different investment options. Understand the ins and outs of these two vehicles.
SEP IRA If you are self-employed, dig into the benefits of a SEP IRA with this piece by Investopedia.
What Is a Solo 401(k)? Self-Employed Retirement Plans. Solo 401(k)s are another option for the self-employed. In this piece, Nerd Wallet lays out how they work.
401(k) and 403(b) Plans: Knowing the Difference. If your employer is a non-profit or government agency, you might have a 403(b) instead of a 401(k). This Investopedia article explains key differences between the two types of plans.
Simple IRA. If your employer is a small business with less than 100 employees, you might be offered a Simple IRA. Investopedia gives insight into how this kind of account works. They also explain Simple 401(k)s and go into the difference between IRAs, Simple IRAs, and Simple 401(k)s. As a result, this site is a great resource to better understand these options.
Shifting Assets Between Retirement Accounts
Backdoor Roth IRA. According to Investopedia, a backdoor Roth is a complicated – but IRS-sanctioned – method for higher-income earners to fund a Roth.
Rollover Chart. You may decide that you want to move traditional IRA assets into a Roth or vice-versa. Or you would like to consolidate several different types of retirement funds. This simple chart from the IRS provides the rules for these transactions. Before you act, confirm that the recommendations on the chart remain consistent with the most current tax laws. A more comprehensive dive into rollovers can be found on the IRS website.
Self-Directed IRAs and Solo 401(k)s
BOOKS
Put Your Money Where Your Life Is: How to Invest Locally Using Self-Directed IRAs and Solo 401(K)s by Michael Shuman. This book explains the nuts and bolts of SDIRAs and Solo 401(k)s, providing practical advice on how to create and manage these accounts. It also provides insight into how to find and evaluate a range of local investment opportunities.
The Self-Directed IRA Handbook, Second Edition: An Authoritative Guide for Self-Directed Retirement Plan Investors and Their Advisors by Mat Sorenson. Now in its second edition, Sorenson’s book provides a comprehensive view of SDIRAs. It goes into depth on prohibited transaction rules, investment structures, and tax pitfalls. This is a valuable resource for those looking to direct their own retirement plan.
ADDITIONAL RESOURCES
Webinar
Make Y(our) Retirement Savings a Force for Good. This webinar, hosted by Lift Economy, the Sustainable Economies Law Center and Michael Shuman (author of Put Your Money Where Your Life Is), was recorded in April 2019. Running at 1 hour 22 minutes, it starts with a 30-minute presentation by Michael Shuman, followed by comments from the other hosts and a Q&A period. Slides from the webinar can be found here.
Personal Stories
Laura Oldanie’s Personal Story. On her website, Laura is extremely transparent about her own investing. In this blog post she explains why she likes SDIRAs and describes the specific investment she made using this type of retirement account.
Finding a SDIRA Custodian
Self-Directed IRAs and the Slow Money Investor. Michael Kuntz, a member of the Northern California Slow Money chapter, explains how several members of the club joined together to research SDIRA custodians and investment options. He includes a link to a fantastic tool that the group used to interview and evaluate their custodians. The workbook includes responses to their questions, as well as a calculator you can use to compare fees. Take advantage of the great work this group has done!
Retirement Industry Trust Association. RITA is a resource that can assist in finding a reliable custodian. Also review Better Business Bureau ratings of any potential custodian company.
Additional custodians that have been mentioned to us include:
Joining with Others
The Next Egg. The Next Egg initiative offers webinars, resources, and a community of people who are interested in SDIRAs and Solo 401(k)s. They request a $9.99 monthly contribution to participate, though there is a one-month free trial period and they are clear that they will not turn anyone away for lack of funds.
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