Using a Solo 401k to buy Rentals

[Chuck Bartowski]

Does anyone use this strategy for retirement purposes? I'm curious as to how difficult it is and how one qualifies for it. My wife stays at home with the kids and we run a small side business inside of an LLC. We have funds in retirement accounts and thought about trying to move some money into a Solo 401k to purchase real estate with.

Anyone have experience doing this? Pros/Cons? 

[Justin Windham]

@Chuck Bartowski

Having a job does not restrict you from having a Solo 401k or from investing into real estate. If the only retirement funds you have at this point are with your current employer, however, those funds are likely tied up until you leave that job. You can check with your employer or plan administrator to see if the plan allows for in-service distributions. Most plans do not, but if yours does, you might be able to self-direct sooner rather than later.

You and your wife might be eligible for a plan via the farm activity. If not, a self-directed IRA is a possible option, but you'll probably want to be able to transfer some assets in since the contribution limits are lower.