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Updated almost 5 years ago on . Most recent reply

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Blake Valdez
  • Salt Lake City, UT
4
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I 130k in my 401k i am 31. Smart to use this money to invest?

Blake Valdez
  • Salt Lake City, UT
Posted

Just wondering if it's a benefit to me to use my 401(k) to invest in real estate?

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Will Fraser
  • Real Estate Broker
  • Salt Lake City & Oklahoma City
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Will Fraser
  • Real Estate Broker
  • Salt Lake City & Oklahoma City
Replied

This depends on your personal investment philosophy and/or what gurus you follow.

For example, many in the FI community would say you should not mix your 401k (normally equities investments) with real estate investments because the diversification you get by investing in the equities market and the real estate market are a boon.  Others will say that the equities market is a sham and on rocky footing and to be avoided.

To the former you should NOT use this to invest, to the latter you should absolutely use this to invest.

My 2 cents: I'd look into rolling this into an IRA on my next job-change and using a Self Directed IRA to invest in real estate. Better still would be if I could convert it to a SD Roth IRA (paying taxes on it upon conversion), and then have something like $97,500 more in my Roth IRA account with which I could play in real estate and have no taxes on the gains.

I hope this helps!

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