BiggerPockets Money Podcast

How to FIRE Faster with a Self-Directed IRA

Jan 31, 2025

Kaaren Hall, author of "Self-Directed IRA Investing: A BiggerPockets Guide," is an expert on self-directed retirement accounts. In this discussion, she reveals how self-directed IRAs can help you break free from the middle-class trap by allowing investments in real estate and more. Kaaren shares strategies to withdraw early, maximizing the potential of your retirement funds to build wealth faster. She also delves into the benefits of alternative assets and the importance of understanding tax implications to enhance your financial journey.

55:45

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Episode guests

Kaaren Hall

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Episode notes

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Quick takeaways

Self-directed IRAs offer greater investment flexibility by allowing alternative assets like real estate, enabling higher returns than traditional stocks and bonds.

Navigating the limitations of self-directed IRAs is crucial; understanding how to generate passive income within regulatory bounds is essential to avoid penalties.

Utilizing non-recourse loans in self-directed IRAs provides a unique strategy for purchasing real estate while limiting personal liability and understanding tax implications.

Deep dives

Understanding Self-Directed IRAs

Self-directed IRAs differ from traditional IRAs primarily in the types of assets they can hold. While standard IRAs typically invest in stocks and mutual funds, self-directed IRAs allow investors to include alternative assets like real estate, notes, and syndications. This flexibility provides the potential for greater investment opportunities and income generation. The distinction lies in the custodian; not all custodians offer access to these alternative investments, highlighting the importance of choosing a self-directed custodian.

Intro

3min

Investing in Real Estate with a Self-Directed IRA

6min

Navigating UDFI Taxes and Self-Directed IRA Mechanics

5min

Unlocking Self-Directed IRAs for Wealth Building

9min

Investing with Self-Directed IRAs

7min

Maximizing Self-Directed IRAs and 401(k)s

26min

Exploring Self-Directed HSAs and Their Role in Early Retirement

3min

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

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