“How to Rollover Your IRA/401k into Real Estate”
Do you have an IRA, 401k, 403b, Defined Benefits plan or similar retirement plan? Many of us do, but many of us do not pay much attention to it. We only think of it increasing as we put more into it and our employers put matching funds. We often do not look at our statements, especially because most are confusing with the varied stocks and mutual funds allocated in one plan. Some of us pay an adviser to pick and chose in which stocks and mutual funds to invest with our IRA or 401k, etc.
It is time for us to sit down and actively get involved with our future. Let us not settle for the common 3%, 4% or even 10% return. Ask yourself these questions:
How much is your plan appreciating annually?
How much are you paying for both your custodian and your adviser annually?
How much do you need monthly and when do you need to retire?
After asking yourself these questions, stop and think about how our country’s millionaires have diversified their portfolios? Donald Trump and Howard Hughes among others used real estate land to help them become millionaires? Now, I am not asking you to invest in REITs or do real estate developments—these are too complicated.
I have found a long-term appreciation strategy that is very simple, safe, and has consistently been performing with annual returns in the double digits well over 10%, in fact, many clients have doubled and tripled their money every two to four years. Here is a testimony from the website of the group I represent.
“We turned $90,000 into $1,125,000
in just 10 years!”
- Robert Simmons, May 2007.
How much do you have in your IRA, 401k etc., and how long will it take you to double your money?
Knowledge is important, even when we have financial advisers. Did you know that Section 408 of the IRS code allows us to use our IRA to invest in Real Estate? There are many things to understand regarding How to Rollover Your IRA/401k into Real Estate, but in general here are the steps:
1. Decide if you need an IRA or 401k depending on the different tax benefits? For me a SEP IRA is best because I am a small business owner and I can contribute much more than the basic $4,000 to $5,000 per year of a traditional IRA. I can also use it to contribute to retirement funds for my employees.
2. Research the rules on consolidating all of your retirement plans; some cannot be consolidated into others.
3. Study the time period allowed for each of your plans and the number of times allowed to rollover or transfer funds without incurring a tax penalty or loss.
4. Find a custodian that has flat fees per year and who manages a self-directing IRA including paying property taxes for you. Not many do.
5. Now you will have to find the best real estate opportunity that is simple, not like income property that requires too much of your time and money for property management. Income property is highly risky and can incur losses. Remember, IRS will not allow some types of real estate, especially, vacation homes or second homes. This particular step may require you to seek a real estate broker or tax attorney, but consider paying one-time fees like a commission rather than increasing fees that chip away at your investment.
6. Once you have found the best real estate(my suggestion is land in a particular metropolitan growth path) that will give you a consistent return well over 10%, you will purchase it with your new self-directing IRA.
7. Now you roll or transfer(REMEMBER: 401k, 403b, and defined benefits plans must be a rollover NOT a transfer) your consolidated plans into the self-directing IRA and use it to purchase the real estate you have chosen.
Sounds easy! The key is to find a group that does all of this for you in order that you don’t mis-step or make a mistake. Of course, I know of one, for which I represent, and I am willing to do all of this for you. The group pays me a standard commission, and you get all of the above services.
Are you ready to step into the Millionaire Zone? Think about it, it is easier than you think. Call me and I can explain it in more detail, 925-426-1120.
I enjoy helping my clients have a better life, to live well, build college funds for children and grandchildren, leave a legacy to their community and family.
Thanks,
And Happy Living Wealthy!
For more information, go to www.landbankinglady.com.