Question about the use of 401(k)/IRA in Real-Estate

[Joshua Kim reid]

Hey everyone! I was wanting to know if anyone would know the benefits of utilizing a 401(k) (if possible), as well as the uses of a IRA of any sort. Any and all feed back is appreciated!

[Randy Rodenhouse]

The biggest benefits are the tax savings. For example, in a Roth IRA if you buy a house for $100k and sell for $150k then the profit of $50k is tax free. The same with a Solo 401k. I buy mortgage notes, rentals, do private lending, etc in my Solo 401k and Roth IRA. A big benefit of the Solo 401k over the IRA is the amount you can contribute. In 2023, aggregate contributions can reach up to $66,000 if under 50 and $73,500 if you are 50 or older. Whereas in an IRA the limits are $6,500 and $7,500 for 50 and 50+, respectively.