[USER]

If you and your partner both had access to a 401k and a 457 and were pursuing financial independence aggressively, would you max out all the retirement accounts or purchase a rental property or a combination of the two.

(Note: We already own 5 rental properties so we have experience with this.)

OPTION 1:
Max out:
Husband 401k – $23,500
Husband 457 – $23,500
Wife 401k – $23,500
Wife 457 $23,500
TOTAL: $94,000

OPTION 2: Purchase a rental property for $200,000 putting 25% down ($50,000) with a mortgage and insurance payment of $1100/month and rent for $1600/month.

OPTION 3: A combination of the two.
What would you do?

Currently have $1 million invested in retirement accounts as well as $1 million in real estate (rental properties).

[Beck]

The 457 is fantastic as you can access it before 59.5 (so, once you separate from your employer, it’s yours to use).

If you already have rentals, how are your retirement accounts doing in comparison?

For me, I would probably max those out for awhile to have some diversification and early retirement cash.

[Jule]

It depends on where the property is. Some states favor tenants, which can make a living nightmare for landlords. Also, not all areas have a high appreciation.

Then factor high insurance, depending on where it’s located.

So, depending on the above, if those factors are not favorable, I’d go with the retirement accounts instead, you’d sleep much better at night.

That’s true passive investment.

[Michael]

I’d probably look at my RE portfolio v. my retirement portfolio and see if I was tilted one way or the other for my tastes.

My preference would be investments vs.

leveraged RE, but that might not be yours.

[Dan]

Reverse engineer this question…. What would your 50, 55, or 65 year old self want when sitting in the living room chair together?

Then set your plan accordingly.

You have the obvious answer.

[Author]

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