Mark Kohler explains that a QRP is just a standard solo 401(k) or IRA, not a secret product. The appeal is self-direction: you control a checkbook account, often through an LLC, to invest in real estate, crypto, or startups. Watch out for unlicensed salespeople charging inflated prices.
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Has someone told you that the QRP is this new cool thing that no one else knows about but their company, a qualified retirement plan. And they're the next best thing to sliced bread. And they're the ones on the planet that understand it better than anyone else and you should buy it from them. Well, I'm going to dispel all the myths, tell you what a QRP really is, and help you find the best product that's going to fit you when it comes to this qualified retirement planning strategy. Now if I sounded a little incredulous or passive aggressive or rude, I apologize. There's some folks out there that are talking about a QRP qualified retirement plan like they just discovered this planet in the universe that no one else has seen and really it's been there the whole time and it's called the moon. So yeah, they're cool. And they just came up with this QRP terminology to sell their sexy plan maybe, and sometimes at a lot higher price than you really need to pay. So let's talk about what a QRP is. Here you are as a business owner and this is your business and it might be a sole proprietorship, it might be an llc, it might be an S corp, but you've got a business and this business is making money. You're thinking qrp, Ooh, ooh. I want to get more write offs in my business. I need to do one of these QRPs because I've never heard of these before. They must be really cool. Oh my gosh. They are the same as setting up. This little qrp is a 401k. It is a solo 401k. Typically if you're the only owner of the business, you and your spouse or maybe a family member, that's all they are. They're a qualified retirement plan that nine times out of 10 is going to be in the structure of a solo 401k. So don't think that they've discovered anything new. Now can a QRP be an IRA or a SEP or a simple. Sure it could. Because a QRP is this overreaching umbrella that means qualified retirement plan that you're going to put money into. Now you can get money there without having a business too. And someone may have said that they're going to talk about the R word, the rollover, and you're going to have this old 401k from a job or an old IRA and you're going to roll this old Money into your 401k QRP and you're going to supercharge it. And you're going to use this to go out and invest, which I'm going to come to here in a moment. So this is basically what a QRP is. They're simple and easy to understand. They're a retirement plan that's going to fit your needs. And when they go, oh well, a QRP doesn't pay this UBIT tax on debt. So if I'm going to buy rental properties, I don't want to pay that. Sure, 401ks don't. So again, they put this little label on it to make them sound really sexy. And can you put a lot of money in here with a contribution and a profit sharing plan and a match? Sure. That's what we do for clients in a solo 401k and we've been doing this for years. But I have clients call me all the time going, hey, Mark, someone's been talking to me about a QRP. Do you know what they are? Yeah, it's a 401k and we're good to go. So this is the first point and I want to talk about the how here in a minute, but of what you can do with this. But it's about having a business and getting bigger contributions than a typical Iraq. Or it's rolling over money into this 401k QRP with from old IRA money and then we're going to go out and invest it. And I want to say one more thing too. The Roth, the Roth IRA plays a kind of a unique role in this because I have clients that have a Roth IRA out here and you cannot roll a roth into a 401k. You can have a 401k that has a Roth piece to it and you can say, this is all Roth and I can roll a regular IRA in there IRA and convert it to Roth. But you can't take a Roth IRA now and roll it into a current 401k. Solo 401k. Now we have solo 401ks that can be half Roth and half traditional. But you got to get the money first, then convert it to Roth. So anyway, this is the first step of understanding what they are and really how awesome they are. And what you can do with it is what I want to talk about next. So just briefly, I want to tell you what your opportunities are in this area. Managing your QRP. The 401k, for lack of a better word, is here's your business and you're going to be making money and you're going to be wanting deductions and you're going to throw it over here into your 401k or whatever. It's going to be this umbrella of QRP definitions that mean a lot of different options. Could even be a defined benefit plan, it could be a pension plan and matching and profit sharing and all that good stuff. Again, all those buzzwords. These companies that are typically not lawyers or accountants or financial adv, they just thought they'd be really good at this and so they're just selling them like hotcakes out there. Once the money's over here, you're going to be the trustee, you're going to control the bank account and then we're going to self direct. That's right, we're right back to the same terminology that I've been talking about for 20 years and that is you're going to self direct this retirement plan. And what that usually means is as you control this Checkbook for the 401k or the IRA or the defined benefit plan, whatever it is, we're going to go over here and set up an LLC so we can move money around quickly, have protection for ourselves as the manager of this llc. And then we're going to go out and invest it and do real estate, we're going to do small business startups, we're going to do restaurants if we want, buy and sell gold silver, we could do cryptocurrency. We can do something very conservative or something very aggressive. And this self directing concept really again freaks out anyone in Wall Street. And I do videos about this all the time where I talk about getting a huge rate of return in your Roth IRA because you can when you self direct it. So in summary, a qualified retirement plan is just a very generic term to mean any of these. A Roth 401K, Regular, 401K, Solo, 401K SEP, Simple IRA or Roth. You want to design it with your tax advisor and attorney to help put it in your overall structure. Be careful getting advice from someone that's not licensed as a professional advisor giving you tax or legal advice because if anything goes wrong, they're not going to be there with malpractice insurance or fiduciary duties as a licensed professional. And the pricing does not have to be off the chart. Some of our prices are cheaper than other non licensed folks. We have a decent do it yourself 401k in a sense that you don't need any consultations, you just need to get it done for under 500 bucks. Then we have the full service, 401k where you spend an hour with a new tax attorney designing your entire structure and looking at your tax return for less than 1000 bucks and you walk away with a solo 401k with a tax ID number with the ability to go open a checkbook. Now I just say that not to be salesy but to let you know the options are here. If you want to get a hold of us, look down below into the details of our law firm with links to our 401k special or self directing or even directed IRA where you can roll over your IRA and start self directing. So hopefully that's been helpful. Don't get bamboozled or sold on a QRP strategy is a really cool something that no one's ever known about. It's simply this. Have fun investing. Keep living your American dream. Thanks so much for watching that video and I want to be your source for tax and legal strategies. 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