For many, most of their liquid assets are inside their traditional IRA or 401k. The annual contribution acts as a powerful incentive because it can be deducted on your tax return.  However, this is a mistake because you are creating a ticking tax time bomb.

Example: an engineer, age 35, contributes $10,000/year to his IRA and/or 401k each year. He’s in a 25% tax bracket and saves $2,500 of tax. After 30 years, he’s contributed $300,000 total and has saved $75,000 of tax. At age 65 the stock market has done well and he now has $1 million. He doesn’t need the money until age 75, when it has doubled to $2 million.

If he and his wife die in a car crash, the $2 million is distributed to their 2 kids and each has $1 million taxable in addition to their normal taxable income. If the combined federal and state tax rate is 40%, the kids pay $800,000 vs. the $75,000 that their Dad saved. It’s always a losing game if the family eventually pays 10 times the tax that was saved.

Here are 3 advanced IRA strategies that are rarely used:

Roth IRA Conversion: If you convert that $1 million (at age 65 in the previous example) to a Roth IRA, there is NO income tax no matter how high it grows. There is also NO Required Minimum Distribution. In the last 15 years of giving tax and retirement income seminars, I find that only 2% have more than $30,000 in a Roth IRA. The reason is that they can’t stand the pain of paying tax on $1 million taxable income created by a normal Roth IRA Conversion. However, I had a client in 2023 that was able to distribute over $1million from his traditional IRA and not have to pay any income tax. He used massive solar energy credits and deductions from the 8/16/2022 Inflation Reduction Act to eliminate his income tax.

Multi-Generational IRA: It used to be the Roth Multi-Generational IRA was one of the most powerful ways to build a family fortune. One could have three generations enjoy tax-free growth. However, the SECURE Act 1.0, effective January 1, 2020, put major limitations on this benefit. If the Dad has a Roth Multi-generational IRA, for his life and his wife’s life (when she inherits the Roth IRA after he dies), there is NO income tax no matter how much it grows. However, after she dies, the kids who inherit the Roth IRA still have no income tax for a maximum of 10 years.

True Self-Directed IRA: Many Wall Street firms claim that you can have a self-directed IRA, but it only means that you can pick from thousands of stocks, bonds, mutual funds, and other Wall Street products. A true self-directed IRA allows you to buy non-Wall Street assets, such as real estate and stock in private companies. In 2024, I found two investments where the upside in 5-10 years can be as much as a 100 times return. So, I bought private stock in these two companies through my Roth self-directed IRA so that there will be NO income tax on the profits.

Attend my Free Live Seminars: Tues. 2/18/2025 or Thurs. 2/20/2025, starting at 6 pm at Hyatt Place, 3535 W. Chandler Blvd. Chandler, AZ 85226. The seminars are followed by a Free catered meal. Topic is “Advanced Tax Strategies: Secrets of Roth & Multi-Generational IRAs!”

Free Tour/Workshop at Solar Reefer (Refrigeration) Factory: Saturday, 3/01/2025, 9am–12 noon.  Topic is “How Solar Reefers can Reduce Taxes to $0 and earn a steady 10-14%!” Lots of tasty refreshments served!

Location is at Advanced Energy Machines: 4245 E. Norcroft Street, Mesa, AZ 85215, ¼ mile SW of McDowell & Greenfield Roads.

To RSVP for the seminars or schedule a free consultation, please contact Dr. Harold Wong at (480) 706-0177 or This email address is being protected from spambots. You need JavaScript enabled to view it.. His website is www.drharoldwong.com.