SD Roth IRA vs Typical LLC
Hi my name is Elliott. This is my first post here. I've been saving and educating myself over the past couple years and am about ready to make my first investment in a rental property to help on my way to financial freedom. My question is about what to do with an old 401k contribution?
I have spoken with my attorney and CPA and received their advice but I wanted to hear from actual investors who have been down this road. If I put my 401k earnings into a self-directed Roth IRA then I can use that money to invest in an LLC I manage to make investments in rental properties. Of course, the goal is to eventually pull money from these investments monthly to I can semi-retire hopefully in 10-15+ years. If I wait out the 5 years with the Roth IRA (so I can avoid any and all future taxes) then I can pull distributions from it with only a 10% penalty (until I'm 59.5). Correct me if I'm wrong but that 10% penalty will probably be less than taxes I would pay on giving myself a monthly salary from a Typical LLC (if I just cashed out my 401k and put the funds into a Typical LLC to purchase properties)?
Having said all this, even if I go the Roth IRA route with the 401k money, I will still be creating a Typical LLC and fund it with other capital I have saved.
Hopefully, this makes sense, I'd really appreciate some advice and suggestions. Thanks