New Legislation Targets Self-Directed IRAs

Looking to take more control of your retirement investments? Directed IRA helps investors diversify beyond traditional stocks and mutual funds by investing retirement funds into alternative assets like real estate, private funds, private lending, startups, crypto, and more. Schedule a call to get started: https://directedira.com/appointment/

We've also published a detailed breakdown of the proposed legislation and what it could mean for self-directed IRA investors:
https://directedira.com/new-legislation-targeting-self-directed-iras/

Self-directed IRAs have helped investors build wealth by investing in alternative assets like real estate, private companies, private lending, crypto, and more. Now, a newly proposed bill in Washington, D.C. has sparked concerns about the future of retirement accounts.

In this video, we break down the proposed legislation, why it was introduced, who it targets, and what it could mean for self-directed IRA investors. We also discuss what the proposal does not change, including the ability to continue self-directing your retirement account under current law.

Whether you're already investing with a self-directed IRA or just exploring your options, this episode will help you understand the facts behind the headlines and what to watch as the proposal moves through Congress.

In this video, you'll learn:
• What the proposed legislation aims to change
• Who could be affected by the bill
• Why retirement accounts over $10 million are being targeted
• What remains unchanged for most self-directed IRA investors
• What to keep an eye on as the proposal develops

Follow for more education on self-directed IRAs, alternative investments, and retirement strategies to help you invest with confidence.

For questions or to learn more about this episode's topic, book a call with an IRA specialist here: https://directedira.com/appointment/

Interested in learning more about alternative investments? Join us this year at the Alternative Asset Summit October 22 & 23, where you'll hear from industry experts and connect with like-minded investors exploring new ways to build wealth: https://altassetsummit.com/

Other:

Mat Sorensen: https://matsorensen.com

Mark J. Kohler: https://markjkohler.com/ 

KKOS: https://kkoslawyers.com

Main Street Business https://mainstreetbusiness.com

Transcript

Welcome And Breaking Policy News

SPEAKER_00 0:08

Welcome everybody to another episode of the Directed IRA podcast. My name is Mark Kohler. I'm here with Matt Sorns, the author of the best-selling book on self-directed IRAs in America with a news flash. This is a big deal. Matt, bring us up to speed.

SPEAKER_01 0:23

Yeah, this is a big deal. There's a new bill coming out of Washington, D.C. That's usually not good news. And in this case, this is not good news. There are lawmakers in Washington, D.C. that want to limit your self-directed IRA. This has been reported by the Wall Street Journal just yesterday. Senator Wyden in the U.S. Senate and Representative Neal in the House of Representatives, these are leading Democrats on both sides, I used to say on both houses of Congress, the House and the Senate, not on both sides of the aisle. But they are not happy about how a lot of tech investors and venture capital investors are using self-directed IRAs to amass fortunes, tax-free, using the same old IRA 401k strategies that have been around for years, and they don't like. They've got a lot of money in these accounts. So they're targeting them with the new bill.

SPEAKER_00 1:17

And the irony of it is they

The Proposed $10 Million IRA Cap

SPEAKER_00 1:20

want to allow congressmen and senators to continue to trade their own portfolios with insider information that seem to be very well-timed. But heaven forbid an entrepreneur gets a high-value IRA brewing because they went out and worked hard and created a business with value and had their IRA invest in one of these projects. I it just baffles me how Congress can think this is okay. I I just love the American way and the American dream, but let's limit it. Let's try to try to stifle.

SPEAKER_01 1:57

Yeah, if you're doing, if you're if it actually works out for you, we don't want it to be that great. We need to put a cap on it. So it's only this this good. So um, but here's let me unpack the proposal. There's some good news and bad news on this. The good news is they didn't restrict anybody's ability to self-direct. If you guys remember back, build back better, back during the Biden administration, there was a bill proposed that said, hey, um, your IRA can't invest in private companies where you have to be an accredited investor. And they were trying to put all these restrictions to basically make it hard for you to use your self-directed IRA to invest in a privately traded company, which is what we do every day at directed IRA. If you're new to this show, by the way, our customers use their IRAs to buy real estate, private companies, small businesses, private lending, crypto. These are all assets your IRA can own, and they always have been from forever ago. There's been a lot of people that have made tens, hundreds, billions of dollars in these accounts with very successful investments using Roth IRAs. This has caught the attention of Congress and a lot of Democrats in Congress who don't like that. Now, the the specific bill here doesn't do anything on self-directing. They didn't try to touch that and say to restrict your ability there. So I'm happy there. That's the good news. So for all of you that self-direct your IRA or planning to, you're not affected, don't worry. But if your account's over 10 million or more, or you're planning on it being over 10 million or more, or that's your goal, this bill wants to limit your ability to have a tax-advantaged account, Roth IRA, traditional IRA, even 401k, any retirement savings account, go over $10 million.

SPEAKER_00 3:35

Again, I'm trying to find a good example or metaphor for this. Like, okay, the Olympics. We want to limit people's ability to use steroids to have an unfair competitive advantage. Okay, I can live with that. But in this situation, it everybody has the same opportunity. Congressmen, senators, and all of us at any age in America can go out and work hard, self-direct, and maybe invest in a new company, a new idea, and get lucky. Maybe sometimes we're unlucky. But we all have the same opportunities, the same risks, the same rewards, and we just don't want you to be too successful. So I'm just, again, probably the biggest advocate for the free market to allow us to invest in what we know best. And so if there's a message here, I want many of you to know is that your IRA can grow based on your investment choices to whatever level of success you can achieve right now. That's the law. I'd like to keep that. Matt, are you voting for this? You're not voting for this, right?

SPEAKER_01 4:40

Yeah, I mean, the sky's the limit, right? And I think my perspective on this, and just from a policy standpoint, is instead of looking at this as which is how the these certain Democrats have looked at this, not to be political here, but these specific Democrats, and not all Democrats are on board with this, by the way. This this is not going to pass. This has no life to it, but it's out there. So I want to talk about it for anybody self-directing or building a retirement savings. Is this mentality is backwards? Why are we looking at these people that have done great in their retirement accounts that have built a large amount of money at them and saying, we shouldn't we shouldn't let this happen? We should be looking at this for everyone else and saying, how can we get other people to do this? How can we get other people's accounts to be larger? Instead, it's like, how do we hold them back down to

Why Wall Street Pushes Back

SPEAKER_01 5:30

to where everyone else is at? And I think that's the uh the wrong wrong way to approach this. And I'm Matt Sorns and I approve of this message.

SPEAKER_00 5:37

Do you Matt, do you think Wall Street chimes in enough on this? I think sometimes I feel, and I'm I'm not I don't consider myself a huge conspiracy theorist. I really don't, but sometimes I think Wall Street wants everyone's 401 to be successful, but not too successful. Don't don't dream too big people. Let us just invest your 401k or your IRA. We're gonna make it just right for you. But these mega IRAs really aren't in the lane of a lot of broker dealers to create and allow for. So I wanted to ask you, do you think they're chiming in as a big proponent or uh against it, or they just be in Switzerland?

SPEAKER_01 6:22

Like, well uh No, I think they're definitely against it. Um why why limit the success and even you know institutions last time on this, the retirement industry in general, Wall Street, you know, all their lobbying groups in DC, they were all against this and um and kind of took the perspective at in investing, we have a free market. Someone could wipe out and go to zero. Is the government coming in to bail you out if your investments don't go well to say, hey, well, here's some money? But no, when you do too well, they don't want you to have the benefits of the retirement account because you did too well. It worked out too good for you. So there's no like, you know, it's a free market. We've said, hey, you make your own decisions. These are your dollars. This is not a pension plan or social security. These are your dollars. You're deciding to save this, you're deciding how to invest in this, and you get the benefits or the downsides based on your decisions on how that turns out. And I think that's in general, like, you know, how we've done individual retirement accounts and even 401ks with your participant accounts where everyone decides where to allocate it. Um, you may have limited investment options in your 401k, but you at least get to make the decisions with amongst what's on the menu. And so so I they're definitely against it. And so the so the bad news is they want to limit you to 10 million bucks. And if you go over that, by the way, you have to withdraw 50% within a year and 100% like within two years. Um, for anyone over 10 million, this wouldn't go into effect for five years. So you'd have until 2033 to get in compliance on this to draw your account down. Um, but that's so that's the bad news. That's a proposal. But I think the the other side of the good news is they've already tried this. It didn't pass last time when they were in the White House, when they had the Senate, and they had the House. Democrats couldn't pass it because even Democrats don't want this. Even a majority of Democrats did not want to let this pass and didn't feel like this this was right. So we'll see. Um, it's out there, want to talk about it. It's in the Wall Street Journal, pretty heavy coverage there. Um, and I know it affects a lot of our listeners here that are saving, and we do have some clients that have large accounts. I mean, the average account here is 160 grand, but we do have a good number of accounts, you know, over 10 million that this could definitely affect. Um, so we want to certainly cover it here on the podcast.

SPEAKER_00 8:43

Yeah. And I, if you're

Smart Self-Directed IRA Investing Choices

SPEAKER_00 8:45

we have new listeners, new viewers to our YouTube channel or listeners to our podcast every week. And if you're new to this show, please know that we give you uh as explicitly as possible and transparently as possible, the steps you can take to take your Roth IRA, your old 401k, your Roth, whatever tax-preferred account you might have, and take steps to invest it in a startup company that you believe in. And please go back to the first 10 episodes of our podcast or just start scrolling through some of the titles, and you'll see podcasts specifically uh dedicated to explaining how to take your IRA and move it to a without tax and without penalty to a custodian like our trust company, direct to an IRA, direct to trust company, where you can invest in these types of ideas and projects. Be careful, do your research. But we're here for you. We and we've got a podcast just packed with information on how to maybe hit the lottery and get lucky with a great idea. The lottery? That's probably not the example they use there. Man, I don't know. Invest in She took it to gambling, you know. Well, there's a lot of people that think Wall Street is gambling. That is true. That is true. When you buy stock in a new startup that's worth, you know, penny stock level, who knows? You know, I don't know. But yeah, yeah, yeah.

SPEAKER_01 10:13

No, I mean I think that's you know, some of that startup investing is kind of high risk, high reward. Most of those startups fail. And so the ones that have done well, why punish those people that have had big returns on it? I think a lot of the tried and true stuff people do with the self-directed IRA is they buy real estate. You know, that real estate's the asset that's made more millionaires than anything else. It's literally not going anywhere. Um, and so whether that's the single family rental down the street that your IRA owns or a private real estate fund or you're doing private lending with your real estate. I mean, those are much lower risk assets. They might not go 100 or 1000 X, then in fact they're not going to, let me just tell you that. Um, but they're not going to zero either. And so those are so so within self-directing,

Events, Resources, And Final Calls

SPEAKER_01 10:55

there's different asset classes that you can choose from. And by the way, we have our alt-asset summit. Go to altassetsummit.com where we go through all these different asset classes and the assets that your self-directed IRA could own. That's a two-day conference in October 22nd, 23rd, Costa Mesa, California. Again, you can go to altassetsummit.com. We have hundreds of our investors that go to this every year and expert speakers across the different things from real estate to startups and venture to private equity to oil and gas to crypto to precious metals, all those different things, speaking there and talking about their expertise and where they see investment opportunities. So get over there to uh get a ticket and we'd love to see you there as well.

SPEAKER_00 11:34

And while you're at and while you're at the event, you can go down to 7 Eleven and buy a ticket to the California State Lottery and uh or buy Tesla stock, either one. You know, either way. Either way. Anyway. Well, I am so grateful um for you, Matt. Matt, you are on the front uh lines of the self-directing space and helping Americans protect their Roth IRAs, their 401ks, and allowing them to invest in what they know best. And I'm so grateful to be a co-host here with you on the show. Everybody, if you've found this helpful, please give it a like, give it a five stars, two thumbs up, whatever the case is, subscribe. We're here every week trying to help teach you the ways to self-direct your retirement accounts and get the best return you can. Matt, any final words?

SPEAKER_01 12:25

No, yeah, please go over to directedIRA.com if we can be a resource to you there. You can book a call with any of our team members for free on about how to get started. We've got, like Mark said, the weekly episodes here, webinars, events. We want to just be a resource for you and give all this education out for free. So thank you everyone for tuning on, tuning in. Um, we will see you next time. Until then, stay calm. Self direct ones.