Use 401K to invest into Real Estate – Best way to diversify and a great way to hedge against inflation

June 7, 2022
Budgeting & Saving , Investing , Personal Finance , Retirement

Use 401K to invest into Real Estate – Best way to diversify and a great way to hedge against inflation

Employee sponsored 401k programs are a sound option for building a retirement nest egg. Pre-tax contributions and employer matching make 401k plans a slow and steady way to save for many Americans.
The limitations of a traditional 401k program, however, may be keeping you from building a much larger investment portfolio. Traditional 401k plans can be limited and are selected by the plan sponsor. Your money is only available for investing in a limited number of options, some of which may not provide both optimal returns and tax advantages.

What are your options and how to use 401k to invest into Real Estate?

There are two options to traditional 401k plans that allow for better control and diversification. First is the Solo 401k Plan, specifically, a Roth Solo 401k, and second, Self-Directed Individual Retirement Accounts (SDIRA).
Solo Roth 401k plans allow you to invest in real estate, tax liens, alternative currencies, options, and private business investments. Similarly, Self-Directed IRA accounts allow you to in a wide range of asset classes. As of 2020, the IRS permits self-directed IRAs to invest in real estate, development land, promissory notes, tax lien certificates, precious metals, cryptocurrency, water rights, mineral rights, oil and gas, LLC membership interest, and livestock.

You may be thinking, “the Roth 401k and Self-Directed IRA sound like great options, but I can’t roll over my 401k unless I leave my company”. Good news, about 77% of employee sponsored 401k plans allow what are called In Service Roll Overs, where you can roll over all or a portion of your existing 401k to a Solo Roth 401k or SDIRA. Of course, you can roll-over 100% of past employers 401k accounts.

To learn more about In Service Roll Over options click here To learn more about Self Directed 401k and IRA options click here To learn more about creating passive income and tax advantages offered by real estate investing click here

IILIFE Ventures is an Austin, Texas based subsidiary of IILIFE. Founded in 2015, IILIFE Ventures has consistently delivered above arrange returns for our investors through carefully vetted and thoroughly researched investment opportunities.

IILIFE Ventures established the REIT Group Curated Fund (RGCF) to capitalize on high growth, highly desired markets like Austin, Texas by developing mixed-use communities that appeal to those seeking a work, live, play lifestyle. IILIFE’s Fund purpose is to reduce risk for investors by also acquiring distressed assets and value add communities throughout carefully selected geographic areas. This diversity of asset class and location reduces risk in the fund, in much the same manner that adding real estate investments as part of your portfolio hedges against the volatility of cryptocurrency, the stock market and inflation.

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