Maxed out roth IRA, Now what?

Question

I typically max out my Roth ira and am looking for additional retirement investment. I receive a w-2 and 10-99's at the end of the year.I am trying to figure out how I can stock pile cash that can grow tax free AND be used as collateral to purchase more Real Estate.

Does anyone know how this can be achieved?

Is there another rout you would reccomend?

Does anyone know how this can be achieved?

Is there another rout you would reccomend?

Mark Nolan · Answer

@Sean Apple

In addition to not only maxing out your Roth IRA, you may be able to also max out your full-time employer 401k plan as well as your self-employed solo 401k. The rules allow for contributions to multiple 401k plans. May of our clients contribute to both. The following IRS website sheds some light on the rules.

https://www.irs.gov/Retirement-Plans/How-Much-Salary-Can-You-Defer-if-You%E2%80%99re-Eligible-for-More-than-One-Retirement-Plan

Brian Eastman · Answer

@Sean Apple

Your 1099 income may allow you to qualify for a Solo 401(k).  Only income from the 1099 source (not the W-2) can be used to make new contributions to the plan, with a maximum at $53K - of which you can elect to make $18K Roth.

You cannot use retirement plans as collateral for your own personal real estate purchases.  When getting a loan, you can show the value of your retirement plans to illustrate overall personal worth, but IRS rules do not allow you to pledge you retirement plan as any kind of guarantee.

With a self-directed Solo 401(k), the plan itself could invest in real estate, with the returns going back into the plan.

Justin Windham · Answer

@Sean Apple Welcome to BP and congrats on looking for better ways to save and grow your extra income. As others have mentioned, you can contribute to multiple retirement accounts and a Solo 401k may be of great benefit to you.

Maxed out roth IRA, Now what?

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