So I discovered that I have two 457b accounts (from a prior job that I had) that combined equal $30,000.
I turn 50 in October and can withdraw the money without penalty and simply pay the tax at my normal income tax rate. (I think that the Feds might take 20% right off of the top at the time of disbursement).
If I take it in a lump sum of $24,000, should I just take the money and use it as a downpayment on a property or should I try to roll it over into a SD IRA (real estate)?
Or is that even allowed? Maybe the IRS just says, "hey, you retired, take your money and pay your tax." ???
My gut feeling is that I should just take the disbursement, pay the tax, and use the remaining money as the down payment on a little $100k four plex in the Cincinnati area. (I am retiring to suburban Cincinnati this Fall)
who will loan your SDIRA the money to complete the purchase? have you checked into loans to SDIRA's they are far and few between
Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222
I can't tell you which one of those two strategies is better for you, but you certainly can do either one. You are not required to take the distributions and pay taxes on your retirement funds, you can roll them over into self directed IRA (or better into self directed Solo 401k) and invest in a tax-deferred environment.
Without knowing your financial situation, credit, experience, etc, a direct answer is not possible.
However, incurring a tax penalty to withdraw funds from a tax-advantaged account of any kind seems like a bad idea.
There are a lot of options to use your funds in a tax deferred environment, and still acquire a 4 plex in or out of a tax deferred account.
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