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IRA Financial Group Blog

On Apple Pie and Retirement Plans

3 Minute Read

What do apple pie and retirement plans have in common? Different recipes call for different ingredients – and that makes sense for retirement plans, too.

Key Points
  • You can use all kinds of apples
  • Saving money can be easy as pie
  • Doing anything with love is important

Apple Pie

A good apple pie should have a flaky crust, crisp sweet-tart apples, a bit of cinnamon, and be sturdy enough to eat without falling apart. From there, though, there a number of ways to cook, top, and enjoy apple pies. That leads to some lively debates among chefs as to the best ingredients, methods, and so on.

Recently, a microwave apple pie has been making the rounds on social media, and after trying it, it is safe to say that in a 1200 watt microwave the crust does get a little bit dark and flaky. While as for the cook time, it does take less time that preheating the oven, and waiting for it to cook at 400 degrees. But the kitchen doesn’t smell the same, and it doesn’t have exactly the same consistency as a “perfect pie.”

But what is a perfect pie? Does it have Macintosh apples in it? Granny Smith apples? Golden Delicious apples? It really depends on taste, and on what works best for whomever is going to do the eating. But there are some apples that “everyone” agrees work better. Does that mean those are the only apples for pie? Of course not. Microwave or oven-made, cooked with some lemon juice or a touch of vanilla, in hollowed-out apples or large baking pans with homemade or store-bought crust. Much like retirement plans, there are options, and it’s important to learn about them to make the best choices.

Retirement Plans

While there are many retirement plans, there are some that are more popular than others, like a traditional apple pie, woven crust, hint of lemon juice in the recipe. Large corporations traditionally offer 401(k) plans so that their employees get some money put away for the their future. Often, those companies will match a certain percentage that should at least get employees interested in saving that small bit for their retirement.

Self-Directed IRA

Self-Directed IRA LLC with Checkbook Control, also referred to as Checkbook Control IRA, is an IRS and tax court approved structure. It allows you to use your IRA funds for practically any type of investment.

A Self-Directed IRA LLC with “checkbook control” prevents you from paying excessive custodian fees based on account value and transaction fees. Instead, with a “checkbook control” Self-Directed IRA LLC, you will use an FDIC backed IRS passive custodian.

The custodian in the “checkbook control” Self-Directed IRA LLC structure is referred to as a “passive” custodian largely because the custodian has no requirement to approve any IRA related investment and simply serves the role of satisfying IRS regulations.

So by using a Self-Directed IRA LLC with “checkbook control”, you can take advantage of all the benefits of self-directing your retirement assets without incurring excessive custodian fees and custodian delays. Because as manager of the IRA LLC, you now have “checkbook control” over your IRA funds.

Solo 401(k)

The Solo 401(k) plan is the most popular retirement plan for the self-employed. The Solo 401(k) Plan (also known as the Individual 401(k) Plan) is an IRS approved type of qualified plan. It’s a popular plan created by the Congress and IRS. The purpose of this plan is explicitly to benefit any business with zero employees except for the owners. The owner can establish their business as a sole proprietorship, LLC, corporation or partnership.

Today, the Solo 401(k) Plan is the most popular plan for small business owners and the like. First, it adds the employee deferral feature. This is an investment you place into a retirement account. You make the investment before taxes and the money goes into your account and builds interest. Because of the employee deferral feature, this retirement plan offers the highest contribution benefits to self-employed individuals. Essentially, it allows you to increase your maximum contribution.

On Apple Pie and Retirement Plans

It’s important to recognize that there is a connection between everything, and apple pie and retirement plans are no different. In the same way some people prefer cobbler to traditional pies, someone may prefer a retirement plan that is offered by their employer, and doesn’t stress them out much. They may not save a great deal, but that might not be their goal at the moment, with other plans on the horizon.

Others like an apple pie with a full flaky crust, and a lattice top that they’ve fully controlled from the beginning. Some like a Dutch apple pie with crumble topping made with fresh, cold butter and classic oats. Some retirement plans are employer-directed, and some are self-directed. Making the best choice for yourself isn’t as easy as pie, but is just as rewarding.

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