Do You Have A "Rich Man's Roth?"

You may have heard that the wealthy don't contribute to Traditional IRAs and Roth IRAs, and that's true, but what do they use? 🤔

​There are basically two buckets your retirement money sits in: 1. A Tax-deferred bucket and 2. a Tax-free bucket, but the only tax-free bucket most Americans know of is a Roth IRA.

The problem with Roths are that there are:

🔹 1. Income limits that keep many Americans from contributing to a Roth. Single tax filers can’t contribute if their gross income is more than $161,000 and married filers filing jointly can’t contribute to one if their gross income is $240,000 or higher.

🔹 2. Contribution limits cap your contributions at of $7,000 for those under 50 or $8,000 for those over 50.

🔹 3. Access restrictions that keep you from using your money whenever you want without penalty.

So what do you do if you make too much to contribute to a Roth or what if you want to contribute more than the cap?

What options do you have for tax-free growth on your money?

What do the wealthy do with their money? Clearly they can’t utilize a Roth to build tax-free income for retirement because they earn too much money.

Most people don’t know the answer to those questions and some people don’t even know the difference between tax-deferred accounts (Traditional IRAs) and tax-free account (Roths). As a result, many people just shove all their money into the tax-deferred bucket where they’re likely going to have to pay some insane amount of taxes on that money later in life (during retirement when they need the money the most). What’s worse is that the money in their tax-deferred accounts reduces the amount of social security they receive.

There are other options though, including what is commonly referred to as a “Rich Man’s Roth.”

In a “Rich Man’s Roth,” your money grows tax-free without the downside risks of regular Roth accounts and without all of the Roth restrictions. It’s like a Roth on steroids and you don’t have to be rich to use one!

The benefits of a “Rich Man’s Roth” are:

🔹 Tax-free Growth: Your money grows tax-free in “Rich Man’s Roth.”

🔹 No Income Limits: These are for low AND high income earners. No matter how much you earn, you can use a “Rich Man’s Roth.”

🔹 No Contribution Limits: You’re not capped on how much you can contribute to your “Rich Man’s Roth” like you are with Roth IRAs.

🔹 Liquidity: You always have access to your money, unlike with Roths or Traditional IRAs. You don’t have to wait several years to access your money and when you do access your money in your “Rich Man’s Roth,” there’s no penalty for doing so.

🔹 Market Protection: Your money in a “Rich Man’s Roth” is protected from market volatility. You never have to stress out when markets are crashing (like they are this year).

🔹 Leverage: You can leverage your money in a “Rich Man’s Roth.” That means that your money can work for you in more places than one, which allows you to earn on the same money multiple times.
If you want to learn more about a “Rich Man’s Roth,” or want to just see how one can work for you, make sure you message us “Rich Man’s Roth" and we can setup a time to discuss it.