In this brief consultation, Speaker A, a long-time 401(k) contributor, expresses concern about market volatility and seeks better returns. Speaker B advises that the 401(k) can be rolled over into a self‑directed IRA, which allows the account holder to invest in alternative assets such as real estate without incurring tax penalties. The conversation explains that the retirement funds remain within the IRA structure, providing tax deferral, and that investing through an LLC adds layers of liability protection. Speaker A, initially uncertain about safety, is reassured that real estate is a stable investment and agrees to move forward with the plan.
Hey Toby, I've been maxing out my 401(k) for years. I know you know a lot about this stuff, so I just figured I'd give you a quick call, but stock market's always up and down, up and down, and I wanted something better. I want to know if you had something that I could do maybe.
Yeah, you're not alone. A lot of people think that their only option is to ride out the stock market. Here's the truth: you can roll that 401(k) into a self-directed IRA, which gives you complete control on how to invest it with no tax penalty.
So I can use my retirement money invest in real estate specifically?
Exactly. You don't touch the money directly. You put it into the IRA. Also, it is tax-deferrable, which helps you grow that 401(k), which is now an IRA.
Sounds a little complicated, but I mean, how safe is something like that?
It's extremely safe. So investing in real estate is probably the safest thing you could ever invest in. Let's say you buy a rental property, you fix it up and you rent it out and something goes wrong. When you put that into the self-directed IRA and you build it into LLCs, you've built in layers of protection that's tax-deferred.
Well, you convinced me. I'll tell you what, let's get something like that moving.
So let me do this, I'm going to send you over some information. We'll get on another call to where we can actually build your LLC. I'll get you hooked up with a self-directed IRA firm that will hold that, and we'll get this ball rolling for you, buddy. I look forward to it, man. You bet. Bye.
