Unlocking the Power of Your Individual (K) Plan

Now that I have an Individual(K) Plan, what do I do with it?

In the first part of our series on Individual (k) accounts we discussed who can have one, and all of the great benefits to starting up an Individual K account.
But now that you have one, do you understand what your options really are?
Do you know what steps to take to get the most benefit out of this incredible tool?

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You have the freedom

A Self-directed Retirement account gives you the freedom to diversify into more than stocks, bonds, or mutual funds. Under your direction, you can buy everything from real estate to deeds of trust and mortgages. Your IRA can do secured or unsecured notes, partnerships, joint ventures and even private stock. You can invest in many other types of assets as well.

While this is true for any self-directed IRA (Trad, Roth, SEP, Simple, etc.), the Individual (K) gives you additional tools and protections not found in the other SDIRA options.

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The “Superhero of the Self Direct IRA’s”

You can do many things with your self-directed retirement accounts no matter what type you have, but when you have an Individual K account, you can do even more. You can;

1. Take a tax-free loan from the account.
   • Use for any purpose
   • Borrow 50% of the account up to $50,000
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2. More Investment freedom
   • Invest in any non-prohibited opportunity that you choose
   • Gains and income flow back into your IK
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3. Checkbook Control
   • No LLC required
   • Easy access to your funds so you can react quickly in a volatile market
   • Avoid transaction fees
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4. Protection from Creditors
   • Self-Directed IK plans have full bankruptcy immunity (Bankruptcy Code, 11 U.S.C. §522)
   • Most states offer protection of IK funds and assets even outside of bankruptcy
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5. Leverage without UDFI
   • Purchase real estate using Non-recourse lending
   • Frees up your IK funds for additional investments
   • The lenders recovery is limited to the collateral
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6. Individual K is generally exempt from UDFI/UBIT

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Conclusion

An Individual (K) plan is a potent tool for maximizing your retirement savings and taking control of your financial future. With the flexibility to invest in a diverse range of assets, borrow funds tax-free, and enjoy creditor protection, it offers advantages that surpass many other retirement accounts. The ability to utilize debt leverage without facing UDFI/UBIT taxes, combined with checkbook control, makes it one of the most versatile options for savvy investors. By fully understanding and utilizing these benefits, you can unlock the full potential of your Individual (K) plan.