Contribute to Roth or put that towards real estate investing goal

116 Replies

Hello,

I am 23 going on 24. I mention my age because I do feel that when discussing a Roth the earliest of your contributions are the most important. My question for you all is if I should continue maxing out my Roth or have that money in a more accessible savings act to use for fueling my real estate investing. I appreciate you guys, thank you!!

@Katie Greenman

Whenever I speak to young people, I always advise to max out your retirement account every year.  Live, Scrape and Save from whatever you have left. Invest from the money you are able to save.  There is no magic in building wealth.  Retirements account should be one part of a diversified savings wealth building plan.

Just my opinion.

@Katie Greenman  I would do both, and I do both. If you can max out a retirement and on top of that max out the your real estate investing you are double winning!!! That is always something later down the road you can look back on to make sure that you're in the best place for retirement income. 

Check into solo 401Ks, SEP IRAs, Direct IRAs if you want to increase your retirement investing and the ability to buy within your retirement. 

@Katie Greenman , I agree with what @Peter Mckernan said: Do both! I am in the process of setting up Directed Roth IRAs that will allow me to use my Roth IRA funds for real estate transactions. Buy & hold, fix & flip, promissory notes, tax lien purchases, etc can all be done by a custodian at your direction, as long as you follow the rules. Because it is an IRA you won't be able to use the profits (without tax penalties) until you reach 59 1/2 years of age, but you can roll profits over into more transactions and grow the ball bigger and bigger!

For what it's worth, I went with Equity Trust. I can get you contact info if desired. Just DM me.

@Katie Greenman FYI - you can pull out the principal amount you contribute to your Roth IRA penalty free. Look up the details yourself, but parking it in a Roth while finding your first investment isn't the worst idea I've heard on these forums. I bet that by the time you're ready to buy something you'll figure out how to close the deal without raiding your IRA too...