Real Estate vs Roth IRA: What's Better for Retirement?

Question

A little background - I am 20 years old, and recently purchased a fourplex that cashflows $930 / month. I am also invested in a roofing business with my brother, and a dumpster rental side hustle. I currently do not have any money in the market.

I’ve been weighing my options for investing for retirement and wanted to hear from others who are solely relying on physical real estate, or those who also have investments in the stock market.

I guess my question is this: Based on this information, is it worth me maxing out a roth IRA or should I just focus on my business and real estate?

Looking forward to learning from you guys.

Kaaren Hall · Answer

First off, congrats—you’re 20, already cash-flowing on a fourplex, and building businesses with your family. That’s a huge head start, and you’re clearly thinking long-term.

As someone who's been in real estate a while, I’d say you don’t have to choose between real estate and retirement accounts—it’s powerful to do both. A Roth IRA, for example, grows tax-free and can complement your active investments by giving you another income stream in retirement. That way, you're not putting all your eggs in one basket—you're building multiple income pipelines: one from rentals, one from businesses, and one from tax-advantaged retirement savings.

Also, don’t assume that investing in a Roth means you have to be in the stock market. With a Self-Directed Roth IRA, you can actually invest in real estate or even private businesses—things you’re already good at—while still getting that tax-free growth.

You're doing great. Keep building, but consider how a Roth or Solo 401(k) could give your future self even more freedom and flexibility.

Ken M. · Answer

That is a controversial conversation. ;-)

Will Soldotna have a devastating earthquake or be down wind from a volcano between now and when you no longer need income and you lose everything? Will devaluation make the dollar worthless between now and when you no longer need income and you lose everything? Can you pull enough fish out of the water to eat and shoot enough deer or bear to eat if the road to Anchorage becomes impassible? A Roth locks that money into a position where it can easily be devalued, taxed, confiscated. If your Roth is in the Stock Market or a Fund, you are doubly at risk by things you don't control.

Do you trust the government to have your best interests at play?

Over the next 50 years your buildings will require upkeep. Your Roth is at the whim of government, taxes and mismanagement. Tell me the major events that will happen between now and 2075 and you can know the best answer. No one in 1975 knew what today would be like. And it's very, very different from what they thought.

I would do both.

Real Estate vs Roth IRA: What's Better for Retirement?

Real Estate vs Roth IRA: What's Better for Retirement?

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