401K plan

[chevelle]

When you leave a job that offers a 401K plan, what is the best option for the money you accumulated? Can you invest it in real estate, without paying a hefty tax?

 

[RedPill]

When you leave a job that offers a 401K plan, what is the best option for the money you accumulated? Can you invest it in real estate, without paying a hefty tax?

Roll it into an investment vehicle that you control. You can continue to contribute to your account on your own if you'd like. The new vehicle will be designated as an IRA and your money will maintain its tax-qualified status. It may be to your advantage to convert it to a Roth IRA, assuming you're still a long way from retiring.

Regardless of how you want to structure it for taxes, you could invest in real estate-backed funds as the underlying vehicle. If you're talking about using the funds to buy property, then no. If you liquidate the account outright you'll pay a 10% tax penalty on top of the taxes.

 

[RedPill]

double post.

 

[Bible_Belt]

good answer

 

[Celadus]

I just learned about self directed IRAs a few weeks ago. You can put anything with value into it (even race horses). Not sure how transferring from other accounts work. Its tricky though. The account has to have enough in it to purchase and maintain the property.

http://www.nytimes.com/2005/04/17/r...61600&en=5728ecbef1662559&ei=5070&oref=slogin
http://en.wikipedia.org/wiki/Self-Directed_IRA