Discover How to Buy a Home Using Your Retirement Account

If you are trying to come up with the money for a house for retirement you may be able to use your retirement account to fund the purchase. You just have to be very careful to follow the rules and regulations when making the purchase, and realize that you are not going to be able to use the house until after you retire.

With what is known as a self-directed IRA you can put the money stored in an IRA toward purchasing a piece of property. That means that you could track down a retirement house that you really like and use the account to buy it with. Many people use this method to purchase houses in affordable foreign countries that they want to retire in.

There are a few stipulations involved with this type of transaction that you have to be aware of though. First and foremost is that you can’t benefit from this house in any way until after you reach 59 years of age. That means you can’t live in the house, work on the house, or let family or friends live in the house until after that point. If you do break this rule you put yourself at risk of a stiff penalty from the IRS.

If you want to go through the steps to acquire a home in this manner then you will have to set up a self-directed IRA with a bank and have them purchase the house for you. You can fund a new IRA account by simply rolling over your funds from existing accounts that you have. This only takes a few weeks and is usually the way that people fund their self-directed accounts. If you don’t have enough in your account or you want to save up more money you can also make your yearly contribution into the new account to put toward your house.

When you buy the house you are free to rent it out to other people as long as all of the money that you make from renting it goes back into the IRA account until retirement. This is an ideal way to hold onto the house since you will have to pay a maintenance fee to have the account open anyway.

As long as you are careful to follow all of the guidelines, you could purchase a home for retirement with your retirement account, and have it waiting for you when you reach 59 years of age.

Discover How to Buy a Home Using Your Retirement Account