How Billionaires Use Special IRAs to Avoid Millions in Taxes

If you haven’t begun saving for retirement, you should start today. Your future depends on it.

And how much money you have does not matter as much as how you save and spend it. What matters most is strategically saving as early as possible for your future retirement.

It doesn’t matter how much money make now. What matters is how much money you can start regularly saving now. And brainstorming how to make extra income as possible.

And if you have an employer that offers a retirement plan, you can easily start saving for retirement. Many employers offer 401 (k)s, IRAs, the lesser-known self-directed Roth IRAs, and other retirement account opportunities.

But many Americans either don’t know to ask or just don’t take advantage of the opportunity.

Do you know who appreciates the benefits of retirement accounts? Billionaires.

And this is not a report on billionaires gaming the system — anyone can do this.

Tax deferral

You may not know the name Peter Theil, but you probably use some of his contributions to society every day.

Peter Theil is one of the cofounders of PayPal, along with Elon Musk. Thiel was the first outside investor to invest in Facebook and one of the initial investors of Air BnB.

He is a self-made billionaire venture capitalist, philanthropist, and tech mogul who is worth at least $4 billion.

And Theil has a self-directed Roth IRA retirement account that is worth over $5 billion.

Theil didn’t game the system or do anything illegal. He saw the value in investing in a retirement account in 1999, when his self-directed Roth IRA was only worth $2,000.

The average Roth IRA account in 2018 was only worth $39,000.

For context, it is important to note that PayPal was launched in 1998, long before Theil became a self-made billionaire.

With a traditional 401 (k) retirement account, employees get a tax break as they make contributions. But they must pay taxes with each qualified withdrawal after retirement.

Roth accounts don’t have tax-deferred contributions. But post-retirement withdrawals are tax-free on the federal level as long as you age 59 ½ or over


And there are several kinds of retirement accounts. Theil opened a self-directed Roth IRA account which allows people to shelter alternative investments in their retirement accounts. In this case, Theil invested in stock shares for private companies and in real estate.

Fast forward 20 years and that $2,000 self-directed Roth IRA opened in 1999 is now worth $2 billion.

Roth IRA contributions are not tax deductible, but for Theil the payoff came 20 years later.

And this isn’t a quirk that only billionaires can take advantage of. Anyone can do what Thiel did.

Talk to your employer and take advantage of all retirement account opportunities available to you.