Family Money, Rollovers, and Getting Started Young


Description

In this session, we focused on practical ways to fund your Roth IRA — even if you don’t think you have much to start with. We talked about closing those useless savings accounts, helping your parents or family members move money into better vehicles, and how partnering with them on deals can create a win-win. I also walked through rollovers from 401(k)s, TSPs, and other retirement plans, and we spent time with younger investors in the room to show why starting early is the best retirement plan there is. We wrapped up with a great discussion on tax avoidance versus tax fraud — and why using the Roth IRA is 100% legal, safe, and powerful.


Key Takeaways

  • Stop leaving money in low-yield savings accounts — redirect it into a Roth IRA.

  • Family money (parents, grandparents, spouse) can often be partnered into deals legally and profitably.

  • Always ask: “Is this portion of the 401(k)/TSP eligible for transfer?” before setting up a self-directed IRA.

  • The Roth IRA has no required minimum distributions (RMDs) — unlike traditional IRAs.

  • The 5-year rule starts the day you first open your Roth IRA — not when you roll funds later.

  • Younger investors benefit the most from compounding and tax-free growth — start today, even small.

  • Rollovers from 401(k), 403(b), 457, and TSP plans generally follow the same rules.

  • Savings in a Roth IRA are safer than in a bank account and shielded from lawsuits.

  • Tax avoidance (using legal strategies like a Roth) is not the same as tax fraud — courts have reinforced this distinction.

  • Combine active income (job/business) with passive income (real estate, IRA) for maximum tax benefits.


Action Steps / Exercises

  1. Savings Check: If you’ve got money in a savings account, calculate how much more it would grow in a Roth IRA.

  2. Family Audit: Talk with a parent or spouse about their 401(k) or IRA — write down if any of it is eligible for transfer.

  3. Five-Year Rule Drill: Write down the year you opened (or will open) your Roth IRA to track when your seasoning period begins.

  4. Young Investor Plan: If you’re under 30, write out one real estate or private lending deal you could complete in the next 12 months using your Roth.

  5. Case Reflection: Summarize in your own words the difference between tax avoidance and tax fraud.