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Updated about 5 years ago,

User Stats

26
Posts
5
Votes
Joe A Warner
  • Wichita, KS
5
Votes |
26
Posts

401k vs Invest in real estate for early retirement?

Joe A Warner
  • Wichita, KS
Posted

Hello,

Today I read "Set For Life" by Scott Trench. It got me thinking about my current situation with my 401(k). 


My background: I am 25 years old and am focused on absorbing as much information as possible about real estate investing. Currently I rent, but here in the next 4 months I am planning to purchase a duplex in my area and house hack it living in one side with roommates while renting out the other side. After that I will focus on multifamily properties and grow my portfolio from there. My goal is to achieve financial freedom by age 35. Right out of college I was a commercial loan officer for a couple years and now I work for a financial tech company that caters to banks. I contribute 6% to my 401(k) as that is what is required to get my company match.


My plan is to keep my 401(k) balance where it is (not withdraw) as I don't want the tax burden, but my questions is... Would it be better to stop contributing to my 401(k) and use that money to invest in real estate instead? My thought process is that if I am wanting to "retire" by 35, investing in my 401(k) doesn't seem to align with that goal very well as that capital is locked up until I turn 59.5 and can make withdrawals. Wouldn't it be better to put that money toward real estate to accelerate my investing early?

Thanks,

-Joe

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