What to do with my 401k?

[Bonnie Low]

I've recently left my long time W2 job after my leave of absence expired when caring for my husband. I have a decent 401k that I do not want to leave in the stock market. Is an SDIRA my only option if I want to use the funds for investing in real estate? I know there are restrictions on how you can use the proceeds from your SDIRA investments and I do need the flexibility to pay myself out of the cash flow from real estate investments. Doing a total cash out is not an option. I don't want the tax hit. I just turned 55 and know I'm eligible to take advantage of the Rule of 55 but also know that will only get me so far relative to the tax liability. If you have an excellent financial advisor who understands real estate investing I'd be interested in talking to him/her.

[Dmitriy Fomichenko]

Quote from @Bonnie Low:

Quote from @Dmitriy Fomichenko:

@Bonnie Low,

Conventional custodians (Vanguard, Fidelity, Schwab, Merryl Lynch, and the like) will not allow real estate investments in an IRA. So, if your goal is to invest in real estate using your IRA funds - you will have to find a custodian who will allow that (aka SDIRA). 

When your IRA buys investment property - the IRA is the owner, not you. All income belongs to the IRA and must flow back to the IRA. As the IRA account owner, you can take distribution from the IRA, subject to applicable taxes and penalties.

When you say "when your IRA buys investment property....you can take distribution..." I assume you mean the SDIRA, correct?

Yes, real estate property can be purchased using a self-directed IRA only.