While a retirement account is clearly intended to fund your retirement years, it is understandable if you need to tap into this money at certain times throughout your life. Especially if you have a robust account built up, it may be a good idea to use a small portion of these funds to invest in other areas of your life so that you can continue to build wealth.
Buy a Home
One of the best investments that you can ever make is to buy a home. According to MarketWatch, the IRS allows people to withdraw a designated amount of money from a personal IRA without facing a penalty if you are buying a first-time home. You can also withdraw this money without penalty if you have not owned a home in the last two years. Be sure to carefully check the rules before going down this path so that you are not faced with stiff penalties. Since real estate is widely considered to be one of the safest investments, using your retirement money in this way may pay off big dividends down the road.
Start a Business
Another great way to leverage your retirement account is to start a new business. Rollovers as Business Start-Ups (ROBS) is a program that allows prospective business owners the opportunity to use their retirement money to invest in the various start-up costs that come with launching a new business venture. According to Franchise Gator, although the ROBS process is complicated, it can be cheaper than a traditional loan. Since it is not officially a loan, you will not take on debt.
Invest in Education
There is no better investment than the education of yourself or your children. It is easy to justify tapping into this money when you know you are investing in something that will deliver a significant payoff in the future. If you are able to fund your child’s education without putting your own retirement security at risk, this is a good way to help them get the best start possible in life. There are a variety of rules governing what accounts can be accessed without incurring penalties, making it important that you do your homework before proceeding.
You have worked hard to build up your retirement account. However, life happens and you may need to use those funds for certain occasions such as buying a home, starting a business, or investing in education. Whatever you decide, it is in your best interest to use this money in a way that secures your future and brings you happiness.
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