Can You Build a Million-Dollar Nest Egg with a Real Estate IRA
What’s the limit of a self-directed IRA? You might be surprised at the answer. The truth is, having an account like a Real Estate IRA opens up a world of possibilities that you wouldn’t have otherwise been exposed to. But there isn’t opportunity without risk, either. That’s why it was interesting when USA Today recently published an article titled 11 Steps to a Million-Dollar Nest Egg.
Is the process really that simple? And if so, might a Real Estate IRA have a role to play in building a nest egg of that size? Let’s find out:
The “Eleven Steps” of Boosting Wealth over Time
A lot of the steps you’ll read in the USA Today article are great advice. If you can get started with investing early, you’ll make use of compounding gains and utilize a tremendous amount of value over time. Another step, being prepared for bad times in the market, is a great psychological and investment tool for not making silly mistakes simply because the markets are going down.
Another tip, “Let your time frame determine your allocation choices,” is of particular interest. When investing experts talk about allocation, they’re referring to which types of assets your money is in. Is it in the stock market? Real estate? Precious metals? Bonds?
It’s true that your age should have an effect on the kind of asset allocation you’re working with. But the article does miss on one opportunity for creating massive growth in your retirement nest egg. And after all, don’t older investors need to utilize their capital and look for the impressive gains so they can catch up with the early birds?
That’s where the Real Estate IRA comes in.
Building a Better Nest Egg with a Real Estate IRA
One of the ways you can accomplish many of the steps on the USA Today list is simply to allocate some of your portfolio into real estate. This not only diversifies your holdings away from the stock market, but will give you an opportunity to utilize the protections of a retirement account while your real estate potentially grows.
There’s no guarantee that your real estate purchase will go up in price. But collecting rent via a property manager while holding your property in a Real Estate IRA is a sure way to build up capital in your nest egg—and do it quickly.
There are other advantages built in to holding real estate through an IRA. In addition to the tax protection, holding real estate can be a way of preserving your net worth even if you think a recession is due around the corner—in two years, five years, even ten years. That’s one powerful way of protecting yourself psychological from making those life-changing mistakes when the stock market inevitably corrects.
A Better Nest Egg, One Step at a Time
Overall, USA Today’s 11 tips are useful. For someone who hasn’t done much investing before, especially young retirement investors, they’re even essential. But it’s important to remember that your options aren’t that limited, either. There’s more than one way to skin the proverbial cat, after all, and holding real estate within your retirement accounts is one way to build a lot of wealth over time.
But don’t make any big leaps until you understand them—and you understand what steps come next. In order to do that, I encourage you to read the USA Today article and then travel back here to www.AmericanIRA.com and find out more information on what a Real Estate IRA looks like. And don’t forget to call us at 1-866-7500-IRA(472) with any questions.