Where do you park your money if you want to retire by 50 or 55?

Question

Hello everyone, I am a 26yr old father of 4 and want to grow a large portfolio for retirement. To be able to travel and take care of my kids if they need me to! I currently have a well-paying job and put my money into my 401k, but my company doesn't match or anything. I feel I should put my money elsewhere since I can't pull out money from that account early, and there aren't any benefits right now, rather than it just being a basic savings account. Please let me know the best places to park my money for early retirment. Thank you in advance for all the feedback!

Clayton Silva · Answer

Couple things to answer your question:

1) The investment vehicle depends on a lot of different factors: how much are you working with currently, how much do you contribute annually, how much do you need to do those things at that age, what is your sleep number (this is my favorite investing question because each person is different).  All the "sleep number" is, is what amount can you invest at what risk level can you invest it and still sleep ok at night.  If your investments are keeping you up at night, you don't have the risk tolerance nor understanding for your current portfolio.

2) Can you build and grow a business between now and then that can eventually run itself with you largely hands off? This is going to be the most efficient way to retire.

3) What areas do you have an edge/understanding/grasp/ability to invest in?  For some people the best investment is real estate, for others it is ETFs.  Neither is really about the vehicle but more the understanding and discipline to execute a strategy by the individual investor.

Steve Smith · Answer

Lots of good ideas.

Real estate is the BEST way to wealth, bar none. Learn it, buy SFHs for long term rentals. NO DUPLEXES, too much work (need to spend time with the kids). Get a self directed Roth IRA and convert your current IRA into that. The Roth will be your retirement. Use it to control real estate with leases and options. You'll need friends in the business to help with that (experienced investors only). You'll need a LOT of education on real estate investing. But only from those that have done it and still teach it. Don't take courses from Kids under 50 years old, you want the experienced ones only and expect to pay in the $600 range for a weekend course.

Chris Seveney · Answer

I recommend getting a financial advisor that also is open to alternative investments like real estate. Just do not get a person who wants you to throw it in 60/40 bonds in there portfolio, someone who is actually looking at for your interest is what I would do. THis is not an easy answer as I am heavy in real estate because I know real estate- I do not know markets but my best friend is heavy in stock market because that is what he knows. So its not only what is a good investment, but its investing in what you know.

Deb S. · Answer

@Lawrence Adair

I love your mindset and mission! Sounds like you’ve already built a strong foundation through hard work, and now you’re focusing on what truly matters—financial freedom and creating a legacy for your children. Real estate is a great asset for wealth-building, and pairing it with the right financial tools can amplify your results even more.

One strategy to consider that aligns perfectly with your goals is using a properly structured permanent life insurance policy for Infinite Banking. It allows you to grow and access capital tax-free, protect your family, and create a financial system that your kids can use for generations. Many real estate investors use this strategy to fund deals, and even replace the need for traditional banks by using the cash value built up in the policy.

I’d love to connect and share how this could fit into your real estate wealth-building plan. No pressure, just a conversation to explore if it’s a good fit for your family. Let me know if you're open to it! 🚀

Jonathan Bombaci · Answer

Lawrence, it sounds like you are thinking about the right things early on, and that already puts you ahead of most people. I am a big believer in building a real estate portfolio as a path to early retirement. You get cash flow, appreciation, tax benefits, and the ability to refinance and pull out equity to grow even faster.

If your 401k does not have a match and you are hoping to retire before you can access it without penalty, it might make sense to shift some of that money into places where you have more control. A lot of people I know have built real wealth through a mix of rental properties and small business ownership.

A great starting point is buying your first investment property in a strong rental market within 30 minutes of where you live. If you manage it well, you can use the income and equity to grow from there. It is not always exciting at first, but it builds momentum. I have seen people go from their first property to full financial freedom in under 10 years while still working a full-time job. It is not flashy, but it works if you stay consistent.

Keep stacking good decisions and stay focused on the long game. Starting at 26 gives you a huge advantage. Feel free to share more about what you are thinking or where you are looking—there are a lot of people here who are happy to help.

And if you are looking for more aggressive growth, start showing up to local meetups. We host four or five free ones each month across New England under the name Simplified Real Estate Meetups. You can find them under Events here on BiggerPockets. They have helped a lot of people scale quickly. A few members went from their first deal to over one hundred units in just a few years. It all depends on how hard you want to push.

Henry Clark · Answer

OP.  Would need to know your resources, skill sets, risk tolerance.

Looking at your background your in Texas and are a real estate agent?

Your objective by 50 55.  You’re not going to get there parking our money.  Your going to have to make it in your families living costs and I would say REI since your an agent.

1.  Family living.  Want you to build or buy a small storage location.  Build a managers living quarter big enough for your families needs for the next 5 years.  You’re going to sell and move at the end of 5 years or sooner.  Then build bigger.  This will give you cheap deductible housing and all support costs.  Even your water hose can be deducted.

2.  Food and clothing.  Look for one of my posts or responses on this.  Cut your food and clothing costs to a 1/4 of your current costs.

3.  401k your going to lose money for the next 5 years.  4.  Real Estate agent will be kind of da generous unless your the top 5% to make a living.

5.  REI- approach.  Appreciation, cashflow, cash snowball.  You need to focus on Cash snowball approach while looking for the other two approaches.  6.  Texas is the greatest state for property total sales.   Learn the rules.  Do just “off list” tax sales.  Don’t go to the auctions.  Buy for $5,000 sale for $25,000 example.  Dont worry about paying taxes.  As you accumulate cash start adding Appreciation and cashflow assets.

7.  Research paying for college.   Either Texas college fund or see if you can join the Reserves and College may be free at Texas schools.   Check this. I know for military but don’t know for Reserves.      8.  Start attending REi meetups.   Don’t tell anyone outside your REI acquaintances your plans or objectives.  Not even your family or coworkers. Keep learning.

Paul Novak · Answer

It all depends on your goals.  If you want my simple advice I would make sure I am maxing out an HSA if you have one offered to you and make sure to invest the money that is in that account.  Next I would max out a Roth IRA each year if your income level allows it.  Yes the gains in this account can't be accessed until retirement age but you can pull your principle out before retirement age so the account is less restrictive.  Lastly I would park my remaining money in a taxable brokerage.  Investing in this account will allow you to access your money preretirement age.  You will pay more in taxes but it will help you avoid the middle class trap.  What I am about to say makes this seem to simple and its really boring but I would park all that money in the lowest cost index fund that tracks the S&P 500.  I personally like VOO.  I still follow this strategy myself for the money I put in the market.

I plan to retire at 45.  For me it's more work but long term rentals have super charged my returns.  Yes it's more work but I have found it more rewarding and allowing me to grow my income quicker.

Jeff Roth · Answer

Hi Lawrence-

You are a 26 year old father of 4 and want to grow a large portfolio for retirement by 50 or 55 and want to be able to travel and help your kids.

You have a well paying job with a 401K with no company match and wonder where to put your money.

Congratulations on looking at your investment options at a young age.

Personally, I would look at investing in duplexes in a place like Lansing, MI where you can buy a decent duplex for around $130,000 with room to improve the property and rents. This will give you a strong cashflow position and in a short period of time you can pull out equity and go and buy the next duplex the same way. We have an excellent property manager there to keep your investment as passive as possible.

Doing this consistently over time will have your properties going up in value, debt going down, and rents increasing to help you achieve your goals-not to mention the tax savings along the way.

To Your Success!

Where do you park your money if you want to retire by 50 or 55?

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