Rowlett, TX · Member since 2015 · 6 posts · 0 votes
Roll it over into a IRA?
New into Real Estate investing and I'm trying to do some creative financing. My wife decided to stay home and look after our two kids. She has a 401k with a balance of 15k just sitting there. If she doesn't plan to go back to work anytime soon or ever - what can we do with this money?
I would love to invest with it but not sure if we can roll it over into a self directed IRA. How can I help my wife with this issue?
Any advice will be helpful and appreciated.
Merry Xmas and Happy New Year to all my BP family.
I commend you guys on this decision for your wife to be a full time mom. This is the most valuable job she can have!
Since she is no longer working for a company, the 401k is with the past employer and is eligible to be rolled over into an IRA (which can be self-directed). For most people $15K is not much to work with, but I had a client who started Checkbook IRA with just under $3K for his wife and was investing in tax liens (your investment strategy and your investment goals and plans would dictate if it makes sense for you).
So the short answer is YES, it can be self-directed. But before you jump decide how you are going to use the funds. SD IRA comes with the cost which needs to be justified.
Hope this helps. Merry Christmas to you as well and remember the reason for the season!
The rules allow for investing IRA funds in real estate (see the following IRS link for more information on this:
https://www.irs.gov/Retirement-Plans/Retirement-Pl...) It may be a good idea to open a self-directed IRA with a custodian that charges low fees such as IRA Services Trust company. Also, if you need more funds, consider pooling your spouse's IRA funds with other investors for investing in real estate.
As @Mark Nolanand @Dmitriy Fomichenkoindicated, be aware of what the fees are going to cost you. I was going to help my son invest 10k in an SDIRA and the fees made it prohibitive with a small amount. There are many more custodians around these days so the fees may be pushed downward.