How to Invest in Real Estate with Retirement Funds

Looking for ways to invest in alternative assets such as real estate, cryptocurrency, precious metals, private equity, peer to peer lending or startups? Consider rolling over your 401K or IRA into a Self Directed IRA or Solo 401K. Once you set up your Self Directed IRA or Solo 401K, you might consider syndicated real estate investments for diversified passive income.

Self Directed IRA

A self-directed IRA or SDIRA is very similar to a traditional IRA. The government generally treats these retirement fund options as if they are one and the same. For example, the same investment limit that you will find for a traditional IRA is used for an SDIRA. In 2023, you can contribute up to $6,500 (or $7,500 if you are over the age of 50).

With a self-directed IRA, the account holder can choose which assets to invest in, and they are responsible for conducting their own due diligence and managing their investments. The account holder must also comply with the IRS rules and regulations governing IRA investments.

Solo 401K

A Solo 401(k) is a type of retirement savings account that is designed for self-employed individuals or business owners with no employees other than a spouse. This type of retirement plan is also known as an individual 401(k), a self-employed 401(k), or a one-participant 401(k).

With a Solo 401(k), the account holder can make contributions both as an employer and as an employee, allowing for higher contribution limits than with traditional IRAs or other types of retirement accounts. The employer contribution can be up to 25% of compensation, while the employee contribution limit is $22,500 in 2023.

Solo 401(k)s also offer a range of investment options, allowing the account holder to invest in stocks, bonds, mutual funds, and other assets. Like other retirement plans, the funds in a Solo 401(k) grow tax-deferred until they are withdrawn in retirement.

Recommended Providers

Rocket Dollar - Rocket Dollar offers Self Directed IRAs as well as Solo 401Ks. Rocket Dollar offers two plans, the Silver plan is $15 per month with a one time $360 setup fee and the Gold plan is $30 per month with a one time $600 setup fee.

Nabers Group - Nabers Group only offers Solo 401Ks so you need to have an LLC. The cost to set up a 401K with Nabers Group is $499 initially and $99 per year thereafter.