CONTACT US

ADDRESS

DelCam Holdings, LLC

320 Nevada Street, Suite 301

Newton, MA 02460

Email: STrotta@DelCamHoldings.com

Tel: 617-281-7038

The information contained herein is confidential information regarding DelCam Holdings LLC (“DelCam”). By accepting this information, the recipient agrees that it will, and it will cause its directors, partners, officers, employees, attorney(s), agents and representatives, to use the information only to evaluate its potential interest in the investments and strategies described herein and for no other purpose and will not divulge any such information to any other party. Any reproduction of this information, in whole or in part, is prohibited. These contents are proprietary information of DelCam and may not be reproduced or disseminated in whole or part without the prior written consent of DelCam. Each person accepting this document hereby agrees to return it promptly upon request. General solicitations, prospecting by mail and advertising are strictly prohibited.

The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or to participate in any trading strategy or potential fund to be sponsored by DelCam. If any offer of securities is made, it will be pursuant to a definitive offering memorandum prepared by DelCam that contains material information not contained herein and which supersedes this information in its entirety. Any decision to invest in the strategy or fund managed by DelCam should be made after reviewing such definitive offering memorandum, conducting such investigations as the investor deems necessary and consulting the investor’s own investment, legal, accounting and tax advisors in order to make an independent determination of the suitability and consequences of an investment. An investment in DelCam’s strategy involves significant risks, including loss of the entire investment.

 

All performance and internal rates of return contained herein are subject to revision by DelCam and are provided solely as a guide to current performance expectations. Past performance does not guarantee future results. Actual results may vary. As of the date hereof, DelCam has not made any investments. There can be no assurance that DelCam’s strategy will achieve any targets or that there will be any return on capital. Historic performance is not necessarily indicative of future performance, which could vary substantially. The performance figures contained herein are provided on a net basis. The performance is calculated in U.S. dollars.

As used herein with respect to an individual investment, “IRR” is intended to represent the net compounded annual internal rate of return on the realized investment. The IRR is calculated from the time each investment is made until the date such investment was disposed of, fully or partially, and is based on the aggregate capital contributions made to, and on the aggregate realized proceeds (including all cash received from the disposition of the investment and any other cash received from the investment, including payments of principal, interest, dividends, if applicable) from, the respective realized investment.

The information presented herein, including, but not limited to, DelCam’s investment experience, returns or performance, investment strategies, risk management, market opportunity, representative strategies, portfolio construction, capitalizations, expectations, targets, parameters, guidelines, and positions may involve DelCam’s views, estimates, assumptions, facts and information from other sources that are believed to be accurate and reliable and are as of the date this information is presented—any of which may change without notice. DelCam has no obligation (express or implied) to update any or all of the information contained herein or to advise you of any changes; nor does DelCam make any express or implied warranties or representations as to the completeness or accuracy or accept responsibility for errors. The information presented is for illustrative purposes only and does not constitute an exhaustive explanation of the investment process, investment strategies or risk management.

Certain information contained in the presentation constitutes forward looking statements which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negative thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of DelCam may differ materially from those reflected or contemplated in such forward-looking statements.

Investments in DelCam’s strategy or fund are not deposits or obligations of, or guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency.

No person (other than DelCam and its principals and employees) has been authorized to make any statement concerning DelCam and any such statements, if made, may not be relied upon.

ARTICLES

Tax Efficient Retirement Planning Strategies

As of this summer, Millennials (those born between 1981 and 1996) comprise the largest generation in the United States, having just recently supplanted the Baby Boomers. This key generation numbers roughly 73 million strong and makes up the largest portion of the US labor force, at 35%, according to the Pew Research Center.

Millennials have matured into a powerful economic force. Accenture estimates that Americans aged 23 to 38 will spend approximately $1.4trillion beginning in 2020 and will comprise 30% of all retail sales domestically. The statistics surrounding this group are abundant, but the point is that this tech-savvy, disenchanted, oft-entitled generation is making real money. Adjusted for inflation, their salaries are higher than just about any other period over the past 50 years, according to the Pew Research Center, with a median income of $69,000.

The obstacles this generation faces have been publicized for years; they are mired in student debt, they can’t afford to move out of their parents’ home, at a time when healthcare and childcare cost more than ever and the US Bureau of Labor Statistics reports that purchasing power today is comparable to what it was 40 years ago. Surveys have shown that by and large this group is skeptical of its ability to become debt-free or ever afford to buy a home. Meanwhile, the clock keeps ticking and retirement is getting closer by the day. Retirement won’t pay for itself and this group likely won’t have a company sponsored pension or defined benefit plan on which to rely.

The common solutions to retirement planning are company sponsored defined contribution plans, also known as 401(k) or 403(b) plans or individual retirement accounts (IRA) – of the traditional or Roth variety. Each of these account types has its own merits and can and should be used in concert with the others, to the degree that is allowed. Defined contribution plans are funded with pretax money and often come with employer matching contributions. The maximum that can be put into an IRA this year is $6,000, or $7,000 if you are over 50 years old. Traditional IRAs are funded with pretax money and Roth IRAs use after-tax income. The difference between the two mainly has to do with taxation on withdrawals after age 59 1⁄2.

Enter a new solution, the Qualified Opportunity Zone fund, or QOF, as they are colloquially known. Created as part of the 2017 Tax Cuts and Jobs Act, Opportunity Zones are census tracts that have been identified as undercapitalized areas in need of investment. By following certain rules and allocating capital to properties or businesses in the defined Opportunity Zones investors can reap a series of tax incentives. The most compelling attribute for Millennial retirement planners is the permanent tax exclusion of capital gains derived from QOF investments so long as the investment is held for at least ten years. What this means is that if an individual invests in a QOF and the QOF earns investment profits after 10 years the investor can withdraw her investment and pay no taxes on the gains. Further, the Opportunity Zone program is scheduled to run through 2047 which allows investors to continue to make tax exempt

investments even after the initial fund is retired. The program’s duration offers Millennials the flexibility to invest for as short as ten years or all the way to retirement age.

The QOF tax profile is similar to a Roth IRA, but without the contribution limit or income eligibility restrictions. There is no maximum investment into Opportunity Zone funds, nor are potential investors disqualified from participating if their income is above a certain threshold. Additionally, QOFs invest in either real estate development projects or engage in private equity-style investing strategies. Both of these investment techniques offer diversification benefits from a strategy standpoint relative to traditional equity and fixed income portfolios. Finally, direct real estate and private equity investing are not easily accomplished in an IRA.

Qualified Opportunity Zone funds offer several attractive investment characteristics that will likely appeal to Millennials investing for retirement. Used in concert with other available retirement investment vehicles, a QOF can be a powerful tool in the Millennial retirement planning arsenal.

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To contact the author:
Richard Gibble, Managing Director DelCam Holdings, LLC

+1 857.200.6190

rgibble@delcamholdings.com