SEP IRA Archives - ROI TV

Your Retirement Recipe: Savings, Plans, and Financial Freedom Tools

Joe Anderson — Thu, 05 Jun 2025 11:55:55 +0000

Retirement planning doesn’t need to be intimidating. Think of it like following a recipe. You need the right ingredients, a step-by-step method, and maybe a little guidance from experts. That’s exactly what Joe Anderson and Big Al delivered with their “recipe for retirement” strategy designed to help you mix savings, smart tax moves, and income planning into a sustainable path toward financial freedom.

The Retirement Blueprint Starts with Saving

Just like no Italian dish is complete without pasta, no retirement plan works without savings. It’s the base of everything. Joe and Big Al emphasized the importance of having a financial blueprint, a personalized guide you can use to see if your current strategy matches your long-term goals. It’s a free tool they recommend to get started—plug in your numbers and get a roadmap.

Understanding Defined Contribution Plans

You’ve likely heard of 401(k), 403(b), or 457 plans. These are defined contribution plans employer-sponsored retirement accounts where you choose how much to save, and the final benefit depends on your contributions and investment returns.

In 2024, you can contribute up to $23,000 to these plans or $30,500 if you’re over 50. Many employers match 4-6% of your salary, so at the very least, you should contribute enough to grab that free money.

If you work in schools, hospitals, or other public service roles, you may be eligible for both a 403(b) and a 457. That’s a huge advantage for supercharging retirement savings.

The Power of IRAs and Roth IRAs

For more flexibility, IRAs offer tax-deferred (Traditional IRA) or tax-free (Roth IRA) growth. You can contribute up to $7,000 annually—or $8,000 if you’re over 50. Roth IRAs are subject to income limits ($146,000 for singles and $230,000 for couples), but higher earners can still access them through a “backdoor Roth IRA.”

Spousal IRAs let non-working spouses save for retirement, and even minors with earned income can open an IRA starting them on the financial journey early.

Defined Benefit Plans: Old School, Still Powerful

While less common today, defined benefit plans (like traditional pensions and cash balance plans) still exist and offer guaranteed monthly income in retirement. They’re typically funded by the employer, with distributions taxed as ordinary income.

These plans focus on what you’ll receive rather than what you contribute unlike 401(k)s where the outcome depends on market performance.

Retirement Options for Entrepreneurs

If you’re self-employed, you’re not left out. Solo 401(k) plans allow you to contribute both as the employee and the employer, with a 2024 cap of $76,500 (if over 50).

SEP IRAs, funded by employers only, allow contributions up to $69,000 and they can be set up retroactively. SIMPLE IRAs are geared toward small businesses with employees, offering easier setup and lower contribution limits.

And since 2023, some of these plans even allow Roth contributions for those seeking tax-free growth.

Making the Most of Equity Compensation

Almost half of S&P 500 companies offer Employee Stock Purchase Plans (ESPPs), letting workers buy shares at up to a 15% discount. That discount is taxed as ordinary income, but it’s still a great perk especially if your company’s stock is on the rise.

Restricted Stock Units (RSUs) and stock options offer even more potential, but they also carry risks. If your compensation is heavily tied to your company’s stock, make sure to diversify. Otherwise, you could end up with too many eggs in one basket.

Evaluating Job Offers with ESPPs

A listener named Jill asked if it’s worth taking a lower-paying job with strong ESPP benefits. My advice? Look beyond just salary. If the company has growth potential and the stock benefit is strong, it could be worth the trade-off. But don’t base the decision on stock perks alone—consider the whole compensation package and your career goals.

S-Corp Owners and Retirement Contributions

Kyle from Seattle asked about retirement plan contributions as an S-Corp owner with no wages. Big Al made it clear: you need earned wages to contribute. Distributions don’t count. So Kyle would need to restructure how he pays himself if he wants to fund a retirement plan.

The Bottom Line

Retirement planning isn’t just about maxing out an account. It’s about understanding your options, using the tools available to you, and balancing growth with tax efficiency. Whether you’re a full-time employee, self-employed, or somewhere in between, there’s a recipe for your financial freedom. Start by saving, diversify your strategy, and stay informed as the rules evolve.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

The post Your Retirement Recipe: Savings, Plans, and Financial Freedom Tools appeared first on ROI TV.

Navigating the 2025 Tax Season

Joe Anderson — Tue, 18 Feb 2025 04:14:10 +0000

The 2025 tax season presents unique opportunities and challenges, and being well-prepared can significantly impact your financial future.

Tax Filing and New Changes for 2025

The IRS has announced that the 2025 tax filing season will commence on January 27, 2025.

irs.gov

The standard deduction has increased to $15,000 for single filers and $30,000 for married couples filing jointly.

irs.gov

Additionally, there have been minor adjustments to the tax brackets to account for inflation.

taxfoundation.org

Understanding how taxable income is calculated within these brackets is crucial. The U.S. tax system is progressive, meaning income is taxed at different rates as it moves through the brackets—a concept often referred to as the “stair-step” method.

Strategies to Reduce Tax Bills

Effective tax planning is a year-round endeavor. To minimize your tax liability, consider implementing strategies such as maximizing contributions to retirement accounts like 401(k)s and IRAs. Charitable planning, including the use of Donor Advised Funds, can also provide significant tax benefits.

Charitable Planning and Donor Advised Funds

“Bunching” charitable contributions is a strategy where you combine multiple years’ worth of donations into a single year to exceed the standard deduction threshold, allowing for itemization and greater tax benefits. Donor Advised Funds facilitate this approach by enabling you to make a large initial contribution, receive the tax deduction in that year, and distribute funds to charities over time.

Long-Term Tax Savings Strategies

Consider Roth conversions to transfer assets from tax-deferred accounts to tax-free Roth accounts, potentially reducing future tax liabilities. Asset location—strategically placing investments in taxable, tax-deferred, or tax-free accounts—can optimize tax efficiency. Additionally, tax-loss harvesting allows you to offset capital gains with losses, further reducing your tax burden.

Retirement Plan Options for Business Owners

If you’re a business owner, explore retirement plan options such as SEP IRAs, SIMPLE IRAs, 401(k)s, and Defined Benefit Plans. Each plan has distinct advantages and considerations, and selecting the right one depends on your business’s specific circumstances. Initiating retirement planning early in the year can maximize contributions and associated tax benefits.

Tax Planning for Real Estate Investors

Real estate investors should be aware of the limitations on deducting passive losses, which are often contingent on income levels. Attaining Real Estate Professional status can provide more favorable tax treatment. Strategies like cost segregation studies and 1031 exchanges can defer taxes and enhance the profitability of your real estate investments.

Tax Implications of Cryptocurrency Payments

Receiving payments in cryptocurrency is considered taxable income and must be reported accordingly. Additionally, spending cryptocurrency can trigger taxable events, as it’s treated as property by the IRS. It’s essential to maintain thorough records of all cryptocurrency transactions to ensure accurate reporting.

Conclusion