Investing from a Roth

[Sam Huze]

I just started listening to the show a few months ago and I have heard many people say that you can invest money that's been saved for retirement. Can someone help me understand how it is possible to invest money that's been saved in a Roth IRA? I thought there were penalties if money was removed from a retirement fund before 59.5 y/o.

[Taylor L.]

@Andrew Davidson is right, you can put your IRA in a Self Directed account, and you can use those funds to invest in real estate. He is also correct that there are requirements and limitations about what you can do. You can't directly or indirectly benefit from the funds - so you can't mix your IRA funds with your regular money, you can't pay yourself out of your IRA, you can't pay your relatives, and so on. Much has been written about the specific limitations on what you can't do with Self Directed IRAs, a bit of further research will give you the basic idea. When you use a SDIRA, you are not removing money from the IRA structure, just moving it to a different type of IRA.

I use my Self Directed IRA to invest in syndications. I'm totally passive in those deals, which is great for a retirement account. I know others who use their SDIRAs to do hard money lending.

There are other account options, depending on your specific situations. Investors in my syndications use SDIRAs, Solo 401(k)s, and others.