How to FIRE Faster with a Self-Directed IRA

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 31 January 2025

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

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Summary

How can you use your retirement accounts to reach FIRE faster? We’ve talked a lot about the “middle-class trap”—having too much of your net worth trapped in your retirement accounts and home equity—and we may have the secret weapon to help you escape it. Not only that, this strategy allows you to keep more of what you earn, take control of your investments, and build a (relatively) passive real estate portfolio while you get closer and closer to FIRE. Of course, we’re talking about self-directed IRAs and Kaaren Hall’s new book, Self-Directed IRA Investing: A BiggerPockets Guide (use code “SDIRA10” for 10% off)! Never heard of them? Self-directed IRAs (SDIRAs) are retirement accounts that give you more control over what you invest in. So, instead of just stocks and bonds, you can use your retirement funds to buy rental properties, become a passive private money lender, and invest in real estate syndications. These investments can often get higher returns than stock market averages, helping you reach your retirement goals faster! So, how do you use it to escape the middle-class trap? Today, Kaaren shares some of the often overlooked strategies to withdraw early from your self-directed IRA so you can FIRE in your forties or fifties instead of waiting until your sixties! In This Episode We Cover Self-directed IRAs explained, plus why they’re a “secret weapon” for retirement Self-directed IRAs vs. traditional IRAs and what you can invest in with each Escaping the “middle-class trap” with early withdrawal strategies for retirement accounts Completely passive real estate investments you can put inside your self-directed IRA How to turn your old employer-sponsored retirement account into a self-directed IRA And So Much More! Links from the Show Mindy on BiggerPockets Scott on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Join BiggerPockets for FREE Email Mindy: [email protected] Email Scott: [email protected] BiggerPockets Money Facebook Group uDirect IRA Get fast, affordable landlord insurance with Steadily BiggerPockets Money Listeners Get 10% Off the Book with Code “SDIRA10” Property Manager Finder Finance Friday: How the “Middle-Class Trap” Stops Your Early Retirement Connect with Kaaren (00:00) Intro (01:23) Self-Directed IRAs Explained (05:49) Buy Real Estate with Retirement Accounts! (10:37) Opening a Self-Directed IRA (13:55) Escaping the Middle-Class Trap (17:41) Real Estate IRA Rules (20:52) Best Alternative Investments (23:56) 401(k) vs. IRA and Minimum Distributions (27:57) Withdraw from Your IRA for FIRE! (34:49) Self-Directed HSAs! (Timestamp) (36:59) When to Use a Self-Directed IRA (41:48) 403(b)s and TSPs (43:20) BIG Changes! (48:20) Grab the Book! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-603 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Are you ready to take charge of your financial future and avoid the middle class trap?
0:04.6	Today, we're going to discuss the secret weapon for real estate investors, the self-directed IRA.
0:10.8	If you are looking to keep more of what you earn, build a real estate portfolio, and surpass your
0:16.9	retirement goals. Self-directed IRAs could be your key to success.
0:21.4	Hello, hello, hello, and welcome to the Bigger Pockets Money podcast.
0:24.2	My name is Mindy Jensen, and with me as always is my self-directed co-host, Scott Trench.
0:29.1	That was a 40, 401-K intro, Mindy.
0:34.5	It didn't quite work that.
0:35.4	We'll try it again next time.
0:36.8	Bigger Pockets is a goal of creating one million millionaires. You're in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting, or how much of your wealth is trapped in your retirement accounts in that classic middle class trap.
0:52.5	We are so excited to be joined by Karin Hall today.
0:55.0	She is the new author of self-directed IRA investing.
0:58.4	I'm not sure exactly what that book will be about.
1:02.1	And we are really looking forward to getting into this.
1:04.5	Karin, thank you so much for joining us.
1:06.2	Thank you so much.
1:07.0	I've been looking forward to this.
1:07.9	I am going to just ooze excitement when we're talking
1:12.3	about IRAs. But wait, this is a really, really, really fun episode. I promise you, because we are
1:19.4	talking about ways that you can make more money and who doesn't want that, right? So, Karin,
1:24.3	let's jump off the deep end and start with what is a self-directed IRA and how does it differ from a regular IRA?
1:32.4	Right. That's such a good question. A lot of people just get confused about that. But IRAs were created in 1975. So you figure 50 years, okay, of the IRA. And when it was created, there wasn't a difference between a self-directed IRA and a typical IRA.
	...

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