Self directed IRA’s
I need a little assitance deciding what to do with my 401K’S, I have two 401K’s with a combined total of about $45K thanks to this economy! I also have a pension plan for $20K. I’m 37 years old and want some creative advice. Should I roll it into a roth and invest it? Or should I roll it into a self directed IRA and invest in real estate, or other investment? Any ideas would be helpful.
Thanks
James
Permalink Submitted by mk foss on Tue, 2009-02-10 05:13
Did you leave your job?
Generally a 401k balance is only available to someone your age if they’ve left the employer. Also a pension is generally only available when you reach the earliest retirement age in the plan.
First step is to see if the benefits are available to you now. If some of the funds are invested in assets that will come back in value, you need to determine if the plan administrator will liquidate them or allow them to be rolled to another entity.
The balances seem fairly low for a real estate investment – if you’d need debt to acquire real estate with your retirement funds, you could be looking at future Unrelated Business Income Taxes.
Permalink Submitted by Jose Morales on Tue, 2009-02-10 16:50
Any IRA in which you made the decision to deposit your funds is a self directed IRA, FYI.
Permalink Submitted by Daniel Liddle on Wed, 2009-02-11 14:33
The key word here is knowledge. In 2008 a lot of Americans trusted their 401k’s and IRA’s to people with fancy degrees in business. Many of these folks could be seen as “EXPERTS”. Most people lost 25-40% of their total account to these experts!!! If you have knowledge in mortgages and real estate and have a SELF DIRECTED IRA you have a beautiful future. On this forum here I am amazed at the knowledge people have of the rules and complications relating to IRA’s-but I am also amazed at the perception(prejudice) that self directed IRA’s are not way to go. My first mortgage deal is a case in point- I purchased a note for $4,500 plus back taxes plus attorney fees plus title work for a grand total of $9,000. In six months the property sold and I(my ROTH IRA) was paid just under $36,000. You must however have very good knowledge of mortgages and real estate. On my last post I told of 36 acres my ROTH IRA has about $20,000 in. There’s a chance I could make $100,000-175,000 on just $20,000 invested!
Permalink Submitted by Jim MacArthur on Sun, 2009-02-15 21:46
I have to agree, lucrative real estate deals and real estate notes can be great for a SDIRA, if you know what your doing, and perform due diligence on your deals. They have been very profitable for me.
Here is an article I wrote which may be helpful:
[url]http://www.thehardmoneypros.com/investing_in_real_estate_and_trust_deeds…