401K Withdrawal - It Ain't What You Earn, It's What You Keep

Are you stuck with your retirement funds in an employer account that forces you to invest with Wall Street or a zero interest bank CD? You have better options. One is taking a 401K withdrawal as a loan. Your 401K withdrawal can then be used to open a Solo 401K account to fund alternative investments.

The recent big news was that the stock markets closed at their highest points in years. But is that really good news? Here is what CNN Money is reporting:

?The Dow rose 1.6 percent last week, ending at its highest point since May 2008. The Nasdaq jumped 3.2 percent over the last five trading days, climbing to its highest level since December 2000, and the S&P 500 added 2.2 percent.?

Isn?t that special. Without accounting for inflation, if you?re invested in the NASDAQ, you got your money back after 12 years. Let?s face it, investing with Wall Street is a money losing proposition. Not yet convinced to make a 401K withdrawal from Wall Street, take a look at the CNN Money forecast of what will happen next with stocks and bonds.

?Given the lack of major economic reports next week and the market?s recent strength, some analysts say stocks are vulnerable to a sell off.?

Here?s the deal, you can take a 401K withdrawal to fund a Solo 401K to invest in a real estate promissory note paying 8%, 10%, even 12% annually and fully secured by tangible property. Only a 401K withdrawal can be done without paying penalties and taxes. Although you can roll an IRA into a Solo 401K and then take a tax and penalty free 401K withdrawal.

Use a 401K withdrawal from your retirement funds trapped on Wall Street instead of falling for the false hope of a sustained bull market. Photo courtesy of: www.flickr.com/photos/wagnertc/3217884983

401K Withdrawal ? How It Works

You take a 401K withdrawal in the form of a loan. As long as it?s a loan, your 401K withdrawal is penalty and tax free. Of course, you have to repay the 401K withdrawal when you take it as a loan but you?re paying the interest to yourself so it?s not a bad deal.

Your 401K withdrawal can be up to $50,000 or half the amount in the account for an individual. A married couple can make a 401K withdrawal up to $100,000 or half the total. Whichever is smaller in both cases. As a loan, your 401K withdrawal must be repaid within five years or the penalties and taxes will apply as if the 401K withdrawal was a distribution. Before you make a 401K withdrawal, you need the advice of a tax or retirement account expert because there are a few easy to meet requirements regarding opening a Solo 401K account with a 401K withdrawal.

Use a 401K withdrawal to fund alternative investments that let you retire early to pursue hobbies. Photo courtesy of: www.flickr.com/photos/theeerin/4860241134

What You Can Invest In With a 401K Withdrawal

With a Solo 401K funded by a 401K withdrawal from your employer account trapped on Wall Street, you can invest in almost anything. Funding a Solo 401K with a 401K withdrawal can invest in precious metals like gold and silver or in a gas and oil exploration company or a fishing charter business. Alternative investments are everywhere when you make a 401K withdrawal to fund a Solo 401K.

However, most investors are looking for security when they invest a 401K withdrawal. The kind of security that comes that comes from investing your 401K withdrawal in real estate. Still, there are many ways to invest in real estate. You can become a landlord or buy commercial property or an apartment building. What makes sense to many people is using their 401K withdrawal to buy the passive income that comes from a real estate promissory note.

Please leave your comments/questions about the strategy to take a 401K withdrawal from a Wall Street cornered account to open a Solo 401K for alternative investing.

written by Richard in Free Reports

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Tags: CNN Money, alternative investments, Wall Street, 401K Withdrawal

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Source: http://www.financialsuccessinstitute.org/self-directed-401k/k-withdrawal-aint-earn-its-keep/

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