Mark Kohler explains how putting your spouse on payroll lets them contribute more to a Roth 401(k) and Roth IRA. He walks through a $69,000 redeployment strategy and shows how 8% to 20% returns could grow to roughly $2,078,000 tax-free in nine years.
When we say don't put your spouse on payroll for these other reasons, but do put them on payroll for this reason, this is a big reason. Here's what's going on in some of your heads. Listening. I can take that 69,000 and go buy a rental property. That rental property is going to make me a 20% ROI with mortgage pay down appreciation, cash flow. I'm going to take that 69, go buy a rental. Yeah, go buy a rental in your Roth IRA. Take the 69 grand, put it into the Roth 401K and Roth IRA and go buy a rental in the retirement account. The point is, so many Americans think, well, yeah, I could put that money back in my business or I could go buy a rental property and get a 20% rate of return. But putting it in a 401 case because I just have Wall Street. No, you don't. Same math right here in my calculator. 69,000. I did an 8% rate of return. So you say you can do 20% with a rental property. We're going to put 20% on this and I'm going to do it in my retirement account. What do you think it's going to be? $2 million. I did a 20% return buying a rental property with my Roth did the same nine years after the initial contribution of 69,000. Now I have $2,078,000 tax free in my Roth IRA because I put my spouse on payroll and redeployed the money in.
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