The financial industry spoon feeds us “averaged” returns investing in the stock market.  But they hide the true effects of all the high fees on your principal balance at retirement and the true effect of the interruption of compounding growth those years the market is down.

If you maxed your 401k/403b, you still wouldn’t have enough. Do the math.

Imagine you’re 35. If you retire at 65, saving a max of $19,500 per year = $585,000. Generously assuming the stock market grows 8% per year, you’d have almost $2.2M, sounds like a lot right? When you consider fees and inflation (have you SEEN how much the fed has been printing!?!) and a 4-5% withdrawal rate, you’re living off of HALF of what you would have had to be making pre-retirement in order to afford to even max your contributions in the first place!

The financial industry tells you you can live off less once you retire because:

       1) your house will be paid off (no mortgage)

       2) your kids are grown and out of the house – c’mon now, we ALL know kids don’t really leave the house until they’re at least 30 nowadays LOL!

       3) your tax bracket will be lower (i.e. you have less income)

Firstly, all of those may not be true for you and secondly, maybe it’s just me, but I don’t plan on making or living off of LESS when I retire. Those “selling points” all assume a lower quality of life.

You worked and waited ALL those years to finally have financial, time and location FREEDOM.  Why waste them stuck inside because you can’t afford to travel, eat out or even just enjoy the rest of your life? I for one, refuse to count pennies when I retire.

Ask yourself, what do I have dreams of doing once I “retire”?

Let’s assume you maxed your contributions, you paid no fees and the stock market averaged 8% growth with no down years – so at retirement you have your full $2.2M. 

Let’s also assume if you retire at 65 and you live 20 more years… at a 4-5% withdrawal rate, you are living off of $88,000 – $110,000 annually. Which might be less or more than what you make now and certainly doesn’t allow for living “the good life” especially one you account for inflation.  In reality, you may live off half of that projection. 

So what’s a solution?

Did you know you could roll your 401k/403b from a previous employer into other types of self-directed accounts, without paying taxes or fees?

Did you know you can then use your newly rolled, self-directed retirement account to invest passively in multifamily deals?!

And because the rules of Self-Directed accounts prohibit you from having direct participation in actively managing a property held by your retirement acct – investing as a Limited Partner in a syndicated deal is a great solution to get your retirement out of the stock market roller coaster and into an asset that appreciates with inflation AND cash flows.

There are plenty of companies that specialize in SDIRAs just a quick Google will take you there!  A few of our investors have already partnered with us using their retirement accounts.  If you’re interested more on how this works, contact us and we can share the SDIRA companies our other investors have used.


Investing in a property using your SD-IRA incurs a UDFI tax if the property is purchased using a mortgage. As most apartment building acquisitions DO leverage debt, speak with your tax advisor on how this will play out in your situation.  You may have other write-offs or options that can offset this tax. 

There are also alternative retirement vehicles that can be used to invest with as to avoid this tax altogether, such as a Solo 401k or eQRP, so be sure to look into these and other options and speak with your tax advisor.

Invest Wisely!

Nicole Pendergrass