An opinion in the Wall Street Journal on January 31 titled: It’s Time To Let 401(k) Holders Invest Like the Pros, written by Scott Higbee highlights the importance of including alternative assets in ones retirement portfolio. The opinion discusses how more than 50 million Americans rely on 401(k) plans for their retirement that typically are self-managed and restricted to a combination of traditional assets of stocks, bonds and cash and how these plans generally don’t provide investors with the opportunity to add a range of alternative assets to the mix. The opinion goes on to argue that given the current dismal yields on mainstream fixed-income securities more 401(k) plan portfolios would be better off if alternative assets, such as real estate were included in their portfolio.
IRA Financial Group understands this dilemma and has helped over 7000 take control of their retirement funds through the self-directed IRA LLC and solo 401(k) Plan vehicles. We have helped clients use their IRA or rollover 401(k) plan funds to make real estate and other investments with their retirement funds in order to better diversify their retirement portfolios.
When purchasing real estate with a Self-Directed IRA LLC or Solo 401(k) Plan, in general, all income and gains generated by your pre-tax retirement account investment would generally flow back into the retirement account tax-free. Instead of paying tax on the returns of a real estate investment, tax is paid only at a later date, leaving the real estate investment to grow unhindered.
Below is a partial list of domestic or foreign real estate-related investments that you can make with a Self-Directed IRA LLC:
- Raw land
- Residential homes
- Commercial property
- Mobile homes
- Real estate notes
- Real estate purchase options
- Tax liens certificates
- Tax deeds