Switching from a 401k or traditional IRA to a self-directed IRA can mean the difference between retiring comfortably to just getting by. On this episode of Investing in Real Estate, you’re going to learn why switching jobs could be an opportunity to maximize your retirement savings.
If you’re switching jobs in the near future, it’s the perfect opportunity to switch your traditional retirement plan to a self-directed IRA. Instead of letting that old account sit there, you can convert it to a self-directed account that will allow you to exponentially grow your wealth. You’re going to learn four major advantages of switching to a self-directed retirement account.
1. Asset Protection
If your retirement funds are locked up in a regular IRA, then your money is at the mercy of the stock market. If there is a downward turn in the market, you could lose nearly all of your life’s savings. For instance, what if you were set to retire in a certain year, you have a good nest egg in your IRA, and then…an economic crisis occurs, and the stock market plunges that same year. You are then faced with the fact that you might have to continue working because you may not have enough to retire on. With a self-directed IRA, your funds can be safe and secure in an asset that you control. If the stock market crashes, your retirement funds will not change; in fact, they will just keep growing. This is because no matter how bad the economy gets, everyone still needs a place to live. That’s where your rental property comes into play. While everyone else is losing thousands, your rental checks will still come in every month, like clockwork.
We would like to place a special emphasis on how switching from a traditional to a self-directed IRA will allow you to invest your retirement funds in real estate, specifically, rental properties. Real estate investments are one of the most secure and lucrative ways of growing your retirement funds, and can be done passively, allowing you to enjoy life while money is pouring into your retirement savings account.
When dealing with a traditional IRA, you give up some degree of control when it comes to investment decisions. Typically, insurance firms, brokerage houses, or banks are the ones that hold a large amount of control over your IRA. This makes a truly diversified portfolio something that is out of reach. It can limit you to investments that may include stocks, bonds, mutual funds, and the like. This can severely impact your retirement funds and keep you from reaching your full savings potential. This is where the self-directed IRA comes out on top, bringing your retirement funds along with it. A self-directed IRA lets you run the show to a certain extent. You have the option to not only rely on your knowledge and best judgment when it comes to your investments, but you will have the chance to grow your retirement funds beyond what a traditional IRA would have brought in.
Do you know what kinds of fees are behind your stock-based retirement account? Check out https://www.feex.com to get a free analysis on your accounts. All you have to do is sign into your investment accounts, and it will tell you what kinds of hidden fees you’re paying. The results can be shocking. With a self-directed IRA, you pay a fee to a custodian. You get transparency right off the bat, and you don’t have to dig into the fine print to know what you’re paying for your account.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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