max out 410K or invest in real estate

[Kevin Scott]

I’m married, 43, and living in New York State. I’m torn between maxing out my 401k with an annual 8% return or investing a majority of that 18k into real estate. If I max out my 401k, I take advantage of the tax benefits of lowering my annual salary. If I use a majority of the 18k to invest in rental property I believe I can get a better return while building equity in the houses I buy. But I’ll be taxed at a higher rate on my salary. Is anyone in the same boat? Does anyone have any advice?

[Sam Josh]

I think always max 401K as it's a pretax contribution so automatically you are getting a 28% (assuming that's your tax bracket) return on those funds. Then there is the company match and then there is the return on your portfolio that grows tax free again. To top it, Some companies match even 2 to 1! It's crazy. So in my mind there is no doubt about the value of a 401k. As for RE, it should be the money you have after you have invested in the 401k. That's my school of thought.