Self Directed Solo 401K

[Christina Tabacco]

Thank you to all who have posed over the years the benefits of a Solo 401K vs Self directed IRA.

Correct me if I am wrong but from what I have read here as a self employed agent with an LLC, a Solo 401k would be a better option than a self directed IRA

Question: How is it possible to take money out of the investments held in a IRA/401K?

What I mean is if I buy a rental and it is cash flowing $1000 (after expenses) how could I tap into that money as passive income NOW not down the road? 

Or if I do a BRRRR or fix and flip how can I tap into some of the profits NOW and get it out of the retirement account so it is easier to access?

Thank you!

[Brian Eastman]

@Christina Tabacco

The simple answer is that unless you are over normal retirement age of 59 1/2, you do not want to pull any funds from your retirement plan.  You will pay tax on the amount distributed as well as a 10% penalty for early distribution if you do.  This is equally true for a plan limited to investing in stocks and a plan invested in alternative assets such as real estate.