401K From Previous Employer What Should I Do?
 

Consider converting to an IRA and Self Direct it - especially if you are tired of the roller coaster ride of the market and want to manage your own IRA funds.


I did this in 2014 when I changed employers. I have been buying real estate and mortgage notes with my LLC owned by Self Directed IRA. My returns are far better than the stock market average and very stable. I even flipped Final Four tickets in my IRA for a fantastic ROI.


I read a book by Mat Sorenson (attorney specializing in Self Directed IRAs) in 2013 that gave me the play book on how to accomplish getting my money out of the stock market and into investments that I could control. After years as the Self Directed legal expert Mat and others started their own IRA Trust Company, DirectedIRA.com. If you are interested in managing your own IRA I suggest reading his book, you can find it on Amazon by searching Mat Sorensen.


You can also watch the following video for a brief summary of Self Directing IRAs. Short Video on Self Directed IRAs


I know this may sound like a sales pitch for Mat Sorensen, but it is not. It is a sales pitch for Self Directed IRAs, which can be set up at many IRA custodians. I think it is the best vehicle for many people to use for retirement accounts, especially for Type A people like pilot. We do love to be in control. Mat just happens to be the expert in the area, so I think he is a valuable resource.


I am very passionate about Self Directing IRAs, as I was tired of watching my brokerage account suffer wild fluctuations. I wanted to create a rental portfolio that would provide me a lifetime of monthly income and not suffer 20-30% reductions in my capital or have companies stop paying dividends and impact my retirement years. The bulk of my cash was in my 401k, so I needed to use to invest in real estate to generate monthly income for retirement. If you have any questions feel free to PM.


If you have changed jobs and already moved your old 401K to a broker you still have the option to move the funds from the broker and start self directing.


Blessings to all and stay safe during these uncertain times.

If you're going to self-direct, need to choose a philosophy...

Long-term growth: Your portfolio should be similar to the age-group buckets that 401k/IRA brokers offer. You can spice that up with specific picks where you've done the research or think you have some industry insight not generally available to the market. Definitely potential to do better than the market.

Speculative/short-term gains: Day trading basically. Risky if you're playing with your only retirement income.


Either way, you'll need to be willing to commit significant time to research and management, especially in the later case. That's why I don't do it.

Interesting 4My,
Couple questions; Who is the custodian of your IRA funds, their liquidity, record etc?

For real estate investing within the IRA, how do you borrow for new purchases or capital improvements, I mean from who? I looked into this a few years ago and had trouble finding a way to borrow from within the Ira. Of course you realize the greatest advantage of real estate investing is leverage and the benefits those real estate loans provide to the property owner. How is this possible within an IRA?

There are managed IRA's which invest in real estate. Or probably almost anything else.

IIRC you can do self-directed, not sure how it works though.

I have thought about trying a Self Directed IRA with rental properties. I have looked at it a bit. I have read that are a lot of fees with the the companies that hold the IRA and they're not always the best operations. I still don't know too much about it.

I should clarify; How is it possible to “borrow money inside of an IRA”, to purchase real estate or make capital improvements?

I recall I read about at least one company that provides that sort of service, provides guidance and whatever financial mechanism is legally required. I was looking into it at one point. Try google?