Hardship 401(k) Withdrawals: Qualifications, Taxes, and Key Rules Explained
When unexpected financial emergencies come up, your retirement savings are often one of the largest pools of money you can tap into. For those participating in employer-sponsored retirement plans, including 401(k) plans, a hardship withdrawal might be one of the few ways to access funds before retirement. That said, hardship distributions are tightly regulated by the IRS, have important tax consequences, and are often misunderstood.
A hardship 401(k) withdrawal isn’t just an early distribution. It’s a narrowly defined exception that allows participants to take a limited amount of retirement funds to address an immediate and significant financial need. While hardship withdrawals can provide temporary relief, they can also permanently reduce retirement savings and create unexpected tax liabilities if not handled carefully.
This 2026 guide breaks down what a hardship 401(k) withdrawal is, how it’s taxed, qualifying events, how it compares to a 401(k) loan or full distribution, IRS safe harbor hardship rules, recent updates under SECURE Act 2.0, and why working with experienced retirement professionals makes a real difference.
What Is a Hardship 401(k) Withdrawal?
A hardship 401(k) withdrawal is a special type of distribution that lets a participant withdraw funds from their 401(k) plan due to an immediate and serious financial need. Unlike a standard distribution, hardship withdrawals are limited to the amount necessary to meet the need and are only allowed if the employer’s plan document explicitly permits them.
Importantly, hardship withdrawals are not loans. They don’t need to be paid back. Once the funds are taken, they are permanently removed from your retirement account.
The IRS requires two conditions to be met:
- The distribution must be due to an immediate and heavy financial need.
- The distribution must be necessary to meet that need, meaning no other reasonably available financial resources exist.
How Are Hardship Withdrawals Taxed?
From a tax perspective, hardship withdrawals are treated as taxable distributions, not as tax-free relief.
Income Taxes
- Hardship withdrawals are taxed as ordinary income in the year you receive them.
- The amount withdrawn is added to your taxable income and reported on IRS Form 1099-R.
Early Distribution Penalty
- In most cases, hardship withdrawals are subject to the 10% early distribution penalty if you are under age 59½.
- Certain hardship situations may qualify for penalty exceptions, like specific medical expenses, but just being in a hardship situation does not automatically waive the penalty.
It’s an important distinction. Many participants assume a hardship withdrawal avoids penalties. In reality, hardship status allows access to funds but does not guarantee relief from penalties.
Hardship Withdrawal vs. Full 401(k) Distribution
A hardship withdrawal differs from a full distribution in several key ways:
Hardship Withdrawal
- Limited to the amount needed
- Allowed only for specific qualifying events
- May be subject to penalties and taxes
- Requires documentation and plan approval
Full Distribution
- Typically happens after leaving your job
- Allows access to the full vested balance
- Taxed as ordinary income
- Subject to early withdrawal penalties if under 59½
For active employees, a hardship withdrawal may be the only way to access funds without ending employment.
Qualifying Hardship Events Under IRS Rules
The IRS defines hardship events narrowly. To qualify, a participant must show an immediate and heavy financial need. Common qualifying events include:
- Unreimbursed medical expenses for the participant, spouse, dependents, or beneficiaries
- Costs related to buying a primary residence, excluding mortgage payments
- Tuition, fees, and educational expenses for post-secondary education
- Payments needed to prevent eviction or foreclosure
- Funeral or burial expenses
- Expenses for repairing damage to a primary residence caused by a casualty loss
These categories are mandatory. If the expense doesn’t fit within the permitted categories or meet plan requirements, the hardship withdrawal can be denied.
IRS Safe Harbor Hardship Distribution Rules
The IRS created safe harbor rules to simplify administration. If a plan follows these rules, the hardship is automatically considered to meet IRS standards.
Under safe harbor rules:
- The hardship must fall within one of the approved categories
- The participant must certify that no other reasonably available financial resources exist
- The withdrawal amount must not exceed what’s necessary to satisfy the hardship, including taxes
Safe harbor rules help reduce ambiguity and audit risk for employers and plan administrators, but they must be included correctly in the plan document.
Hardship Withdrawals vs. 401(k) Loans
Before taking a hardship withdrawal, it’s important to understand how it compares to a 401(k) loan.
401(k) Loan
- Must be repaid, usually within five years
- No taxes or penalties if repaid properly
- Interest is paid back into your account
- If not repaid, the loan becomes a taxable distribution
Hardship Withdrawal
- No repayment required
- Permanently reduces your retirement balance
- Taxable and often penalized
- Only available for qualifying events
In many cases, a 401(k) loan is less damaging than a hardship withdrawal, but it’s not always available or practical, especially if repayment isn’t feasible.
When a Hardship Withdrawal Is the Only Option
Sometimes a hardship withdrawal is the only practical way to access funds:
- The plan does not allow loans
- You already have a loan at the maximum limit
- The hardship involves expenses that cannot be deferred
- Leaving your job is not an option
In these situations, careful planning is essential to minimize tax impact and preserve as much retirement capital as possible.
SECURE Act 2.0 Updates Affecting Hardship Withdrawals
SECURE Act 2.0 introduced several changes that impact hardship withdrawals and emergency access to retirement funds.
How SECURE Act 2.0 Makes Hardships Easier to Establish
SECURE Act 2.0 reduces administrative friction and expands employee-friendly access rules. It makes it easier for employees to demonstrate a genuine financial need and obtain hardship distributions. While the IRS has already moved toward a more streamlined approach, SECURE Act 2.0 reinforces this by encouraging employee self-certification and creating clearly defined emergency withdrawal categories.
Under current rules, employers and plan administrators can rely on an employee’s written or electronic certification that:
- The hardship qualifies under the plan and IRS rules
- The employee has no other reasonably available financial resources
SECURE Act 2.0 lowers the burden on employers to verify every expense as long as safe harbor standards are followed and records are kept. This is a big relief for employees already dealing with urgent financial stress.
Emergency Expense Distributions
Participants may now take limited emergency distributions, up to $1,000 annually, without the 10% early withdrawal penalty for certain unexpected expenses. These distributions can be repaid within three years.
Disaster-Related Relief
The Act also expands penalty-free access for federally declared disasters, including higher withdrawal limits and extended repayment options.
Enhanced Plan Flexibility
Plans now have more flexibility to design emergency savings features, which may reduce reliance on hardship withdrawals over time.
Despite these improvements, hardship withdrawals still follow traditional rules unless the plan adopts these newer provisions.
Book a free call with a self-directed retirement specialist
- Review your self-directed retirement options
- Learn about investing in alternative assets
- Get all of your questions answered
Impact of Trump-Era Tax Rules
The Tax Cuts and Jobs Act (TCJA) continues to influence hardship withdrawal planning in 2026.
Key impacts include:
- Higher standard deductions, which may offset taxable income from hardship withdrawals
- Reduced marginal tax rates compared to pre-TCJA levels
- Temporary nature of some tax cuts, creating uncertainty about future costs
For some participants, taking a hardship withdrawal in a lower-rate year may reduce tax impact compared to future years.
Documentation and Plan Compliance
Hardship withdrawals are closely monitored. Employers and plan administrators must ensure:
- The plan allows hardship distributions
- Proper documentation is collected and maintained
- Safe harbor certifications are obtained
- Distributions are correctly reported
Failing to comply can threaten the plan’s qualified status.
Common Mistakes to Avoid
- Assuming hardship withdrawals are penalty-free
- Taking out more than necessary
- Ignoring tax consequences
- Not considering a 401(k) loan first
- Failing to coordinate withdrawals with overall tax planning
Final Thoughts
A hardship 401(k) withdrawal can provide critical relief during difficult times, but it’s one of the most regulated and tax-sensitive moves in retirement planning. Understanding qualifications, tax treatment, and alternatives is essential before taking action.
With careful planning, proper documentation, and expert guidance, hardship withdrawals can be managed responsibly, preserving retirement security while addressing immediate needs. Working with experienced professionals ensures that what starts as a financial emergency doesn’t turn into a long-term setback.
Top Real Estate Investment Platforms of 2026
Real estate has long been a cornerstone of wealth building. In 2026, technology-driven real estate investment platforms continue to make this alternative asset class more accessible, transparent, and flexible for everyday investors. Whether you are seeking income, long-term appreciation, or diversification beyond the stock market, real estate platforms offer a wide range of opportunities.
This listicle reviews some of the top real estate investment platforms of 2026. Companies were selected based on a review of fees, reputation, investment offerings, historical performance, and investor requirements. We also explain why real estate matters, who it is best suited for, key risks to consider, and how these investments can be held inside a Self-Directed IRA with IRA Financial.
Why Real Estate as an Alternative Asset Class Matters
Real estate is considered an alternative asset because it does not move in lockstep with traditional investments like stocks and bonds. It can provide:
- Portfolio diversification
- Potential inflation protection
- Passive income through rent or interest payments
- Long-term appreciation
For retirement investors, real estate can play a meaningful role in balancing risk while creating durable, income-producing assets.
Top Real Estate Investment Platforms of 2026 (No Particular Order)
1. Fundrise
Fundrise remains one of the most well-known real estate investing platforms in the U.S. It focuses on diversified portfolios of private real estate assets, including residential, industrial, and commercial properties.
Why investors like it:
- Low investment minimums
- User-friendly platform
- Diversified eREIT and private real estate funds
Best suited for: Long-term investors seeking passive exposure to private real estate without managing properties directly.
2. RealtyMogul
RealtyMogul offers access to both individual commercial real estate deals and diversified private REITs. The platform caters to both accredited and non-accredited investors, depending on the offering.
Why investors like it:
- Focus on income-producing commercial properties
- Transparent deal structures
- Options for direct deal investing
Best suited for: Investors looking for commercial real estate exposure and potential income.
3. CrowdStreet
CrowdStreet specializes in commercial real estate investments, including office, multifamily, industrial, and mixed-use projects. Many offerings are structured as direct investments with experienced real estate sponsors.
Why investors like it:
- Institutional-quality commercial real estate
- Sponsor-vetted opportunities
- Strong educational resources
Best suited for: Accredited investors seeking direct access to commercial real estate deals.
4. EquityMultiple
EquityMultiple provides access to private real estate investments across equity, preferred equity, and debt structures. The platform emphasizes professional underwriting and sponsor alignment.
Why investors like it:
- Variety of deal structures
- Focus on risk-adjusted returns
- Strong reporting and transparency
Best suited for: Experienced investors who want targeted exposure to private real estate transactions.
5. Yieldstreet (Real Estate Offerings)
While Willow Wealth, formally known as Yieldstreet is known for multiple alternative assets, its real estate offerings remain a key component of the platform. Investments often focus on real estate-backed debt and structured opportunities.
Why investors like it:
- Shorter investment durations in some offerings
- Focus on asset-backed investments
- Access to alternative income strategies
Best suited for: Investors seeking income-oriented real estate exposure with defined time horizons.
What Type of Investor Is Real Estate Best Suited For?
Real estate investing may be a good fit for investors who:
- Want diversification beyond stocks and mutual funds
- Are comfortable with longer investment time horizons
- Seek potential income and capital appreciation
- Understand that private investments are less liquid
When paired with a retirement strategy, real estate can support investors who want greater control over how their retirement dollars are invested.
Risks and Key Considerations
Like all investments, real estate carries risks that should be carefully evaluated:
- Illiquidity: Many private real estate investments cannot be easily sold.
- Market risk: Property values can decline due to economic or local market conditions.
- Platform risk: Performance depends on management quality and underwriting discipline.
- Regulatory and tax considerations: Improper structuring inside a retirement account can create compliance issues.
This is why working with a knowledgeable self-directed IRA provider is critical.
Investing in Real Estate with a Self-Directed IRA
A Self-Directed IRA (SDIRA) allows you to invest in alternative assets like real estate while maintaining the tax advantages of a retirement account. With IRA Financial, investors can use a Self-Directed Traditional IRA, Roth IRA, SEP IRA, or Solo 401(k) to invest in many real estate platforms and offerings.
Key benefits of using a self-directed IRA:
- Tax-deferred or tax-free growth
- Greater investment flexibility
- Control over asset selection
- IRS-compliant structures when properly administered
IRA Financial specializes in helping investors navigate the rules, avoid prohibited transactions, and invest confidently.
Book a free call with a self-directed retirement specialist
- Review your self-directed retirement options
- Learn about investing in alternative assets
- Get all of your questions answered
Frequently Asked Questions About Real Estate Investment Platforms
Can I invest in real estate platforms using retirement funds?
Yes. Many real estate platforms allow investments through self-directed IRAs or Solo 401(k)s when structured correctly.
Is real estate investing inside an IRA legal?
Yes. The IRS permits real estate investments inside self-directed retirement accounts, provided all rules are followed.
Are real estate platforms risky?
All investments carry risks. Platform quality, asset type, and market conditions all play a role. Diversification and due diligence are essential.
Do I need to be an accredited investor?
Some platforms require accredited status for certain deals, while others offer options for non-accredited investors.
Ready to Get Started?
If you want to learn more about investing in real estate through a Self-Directed IRA, now is the time to take the next step.
Request a consultation with a new accounts specialist at IRA Financial to explore how you can invest freely, diversify your retirement portfolio, and retire confidently.
This article is provided for informational purposes only and does not constitute investment, tax, or legal advice. Any rankings, ratings, or opinions expressed reflect the views of IRA Financial based on internal research, listed criteria, and publicly available data at the time of publication. Rankings are subjective and may not be suitable for all investors. Readers should independently evaluate all options and consult with qualified advisors prior to making financial decisions.
Understanding Required Minimum Distributions (RMDs) for Retirement Accounts
When it comes to retirement planning, how and when you take money out of your retirement accounts can be just as important as how much you put in. One of the most critical rules governing retirement withdrawals, yet often misunderstood, is the Required Minimum Distribution, or RMD.
RMDs are mandatory withdrawals required by the IRS to make sure taxes are eventually paid on tax-deferred retirement savings. Ignoring the rules can result in steep penalties, unnecessary taxes, and avoidable mistakes. This updated 2026 guide explains how RMDs work, when they apply, how they are calculated, how the SECURE Act and SECURE Act 2.0 changed inherited IRA rules, and how to plan proactively.
Key Points
- RMDs are the minimum amounts you must withdraw annually from most tax-deferred retirement accounts.
- RMDs are taxed as ordinary income.
- Roth IRAs do not have RMDs during the owner’s lifetime.
- SECURE Act rules significantly changed RMD requirements for non-spouse inherited IRAs.
- Missing or miscalculating an RMD can trigger penalties of up to 25%, reduced to 10% if corrected promptly.
What Are Required Minimum Distributions?
Required Minimum Distributions are the minimum annual withdrawals the IRS requires from certain retirement accounts once the account holder reaches a specified age. RMD rules apply to:
- Traditional IRAs (including Self-Directed IRAs)
- SEP IRAs
- SIMPLE IRAs
- 401(k), 403(b), and most 457(b) plans
Because these accounts were funded with pre-tax dollars or grew tax-deferred, the IRS uses RMDs to make sure deferred taxes are eventually collected.
Why Do RMDs Exist?
Tax-deferred retirement accounts let you postpone paying income tax for decades. Without RMDs, someone could theoretically defer taxation indefinitely, even across generations. RMD rules prevent that by requiring systematic withdrawals once you reach a certain age or when beneficiaries inherit the account.
When Do RMDs Begin? (2026 Rules)
The RMD starting age has changed over time:
- Before 2020: Age 70½
- SECURE Act (2020): Age 72
- SECURE Act 2.0 (2023):
- Age 73 for individuals born 1951–1959
- Age 75 for individuals born 1960 or later
First RMD Deadline
Your first RMD must be taken by April 1 of the year after you reach your RMD age.
All RMDs after that must be taken by December 31 each year.
Important: If you delay your first RMD until April 1, you will take two RMDs in the same tax year, which could push you into a higher tax bracket.
How Are RMDs Calculated?
RMDs are calculated using two factors:
- Account balance as of December 31 of the prior year
- Life expectancy factor from IRS tables
Formula:
RMD = Prior-year account balance ÷ Life expectancy factor
Example (2026)
Assume:
- You are age 75 in 2026
- Your IRA balance on December 31, 2025, is $500,000
- Your IRS life expectancy factor is 24.6
Your RMD for 2026 would be:
$500,000 ÷ 24.6 = $20,325
That amount must be withdrawn and reported as taxable income.
Special RMD Rules by Account Type
401(k) Plans
If you are still working and do not own more than 5% of the company, you may delay RMDs from your current employer’s 401(k) until retirement. This does not apply to IRAs or former employer plans.
Roth IRAs
Roth IRAs are not subject to RMDs during the owner’s lifetime, making them excellent tools for tax-efficient retirement and estate planning.
Roth 401(k)s
Starting in 2024, SECURE Act 2.0 eliminated RMDs for Roth 401(k)s, bringing them in line with Roth IRAs.
RMD Penalties (2026)
The penalty for missing an RMD has been reduced:
- 25% penalty on the amount not withdrawn
- Reduced to 10% if corrected within two years and reasonable cause is shown
Even with these lower penalties, mistakes can be costly, especially when they involve multiple accounts or years.
SECURE Act Rules for Inherited IRAs (Non-Spouse Beneficiaries)
One major change to RMD rules came from the SECURE Act, which significantly altered how non-spouse beneficiaries must withdraw inherited retirement accounts.
The 10-Year Rule
Most non-spouse beneficiaries inheriting an IRA from someone who died after 2019 must fully distribute the account within 10 years of the original owner’s death.
Annual RMDs May Still Apply
If the original IRA owner had already started RMDs before death, IRS guidance requires beneficiaries to:
- Take annual RMDs during years 1–9
- Fully distribute the account by the end of year 10
Skipping these inherited RMDs can trigger penalties, a common trap for beneficiaries.
Exceptions to the 10-Year Rule
Certain Eligible Designated Beneficiaries can still stretch distributions over life expectancy, including:
- Surviving spouses
- Minor children until they reach majority
- Disabled or chronically ill individuals
- Beneficiaries not more than 10 years younger than the decedent
Inherited IRA RMD rules are now among the most complex areas of retirement taxation.
SECURE Act 2.0 and Inherited Roth IRA RMD Rules
While Roth IRAs are not subject to RMDs during the original owner’s lifetime, SECURE Act 2.0 keeps the 10-year distribution rule for most non-spouse beneficiaries who inherit a Roth IRA.
Although distributions from an inherited Roth IRA are usually tax-free, the account must still be emptied by the end of the 10th year after the original owner’s death. Unlike inherited traditional IRAs, annual RMDs are typically not required for inherited Roth IRAs during years 1–9. However, failing to fully withdraw by year 10 can lead to IRS penalties. Beneficiaries must carefully plan Roth withdrawals even when no income tax is owed.
Book a free call with a self-directed retirement specialist
- Review your self-directed retirement options
- Learn about investing in alternative assets
- Get all of your questions answered
Tax Implications of RMDs
RMDs are taxed as ordinary income, which can:
- Push you into higher tax brackets
- Increase Medicare Part B and D premiums (IRMAA)
- Cause more Social Security benefits to become taxable
Because of these ripple effects, RMD planning should never be done in isolation.
Tax-Efficient RMD Planning Strategies
- Roth Conversions: Convert pre-tax assets to Roth IRAs before RMD age to reduce future taxable RMDs
- Qualified Charitable Distributions (QCDs): Donate up to $100,000 annually directly from an IRA (age 70½+) to satisfy RMDs tax-free
- Strategic Withdrawals: Smooth income across years to manage brackets and Medicare premiums
- Account Consolidation: Simplify calculations and reduce the risk of mistakes
Common RMD Mistakes to Avoid
- Missing deadlines
- Using the wrong IRS life expectancy table
- Forgetting inherited IRA RMDs
- Assuming custodians always calculate correctly
- Ignoring tax and Medicare consequences
Why IRA Financial for RMD Planning
RMD compliance is no longer just a math exercise. Between changing ages, inherited IRA rules, SECURE Act complexity, and penalty exposure, proper planning requires expert oversight.
That’s where IRA Financial stands apart.
Annual Compliance Shield™
IRA Financial’s Annual Compliance Shield™ program provides ongoing oversight to make sure:
- RMDs are calculated correctly
- Deadlines are met
- IRS rule changes are incorporated
- Costly penalties are avoided
Tax Expert Support
IRA Financial’s experienced professionals assist with:
- RMD calculations across multiple accounts
- Inherited IRA distribution planning
- SECURE Act compliance
- Coordinating RMDs with Roth conversions and QCDs
Instead of treating RMDs as a once-a-year task, IRA Financial helps clients turn RMD planning into a strategic tax-management opportunity.
Conclusion
Required Minimum Distributions are a critical and unavoidable part of retirement planning. With the added complexity from the SECURE Act and SECURE Act 2.0, understanding and managing RMDs correctly is more important than ever.
By staying informed, planning ahead, and working with experienced professionals, retirees and beneficiaries can avoid penalties, reduce taxes, and integrate RMDs into a smarter retirement strategy.
With the right guidance, RMDs don’t have to be a burden—they can become a key part of a well-designed plan that protects and maximizes your retirement wealth.
Are You Leaving Money on the Table? A Solopreneur’s Guide to Maximizing Retirement Contributions (2026)
As a solopreneur, every dollar you earn and invest has to work harder for your future. The IRS gives you powerful opportunities to save for retirement in tax-advantaged accounts, but the rules can be confusing, and if you don’t know the limits, you may be leaving money on the table. With contribution limits always changing, it’s the perfect time to review your options and learn about maximizing retirement contributions.
Whether you want the highest contribution ceiling, the simplest administration, or flexible Roth opportunities, there’s a plan designed to fit your needs. This guide breaks down the 2026 limits and shows you how to make the most of your retirement savings through IRA Financial’s specialized solutions.
2026 Contribution Limits Takeaways
- Solo 401(k): Defer up to $24,500 (employee). Total annual additions (employee + employer + after‑tax) up to $72,000, plus catch‑ups: $8,000 (50+) or $11,250 if age 60–63.
- SEP IRA: Employer contributes up to 25% of comp, capped by the $72,000 annual additions limit. No catch‑ups.
- SIMPLE IRA: Employee defers up to $17,000; catch‑ups $4,000 (50+) or $5,250 (age 60–63). Employer match up to 3% or 2% nonelective.
If you’re running a team of one (you and possibly a spouse), the Solo 401(k) typically lets you put away the most, with Roth, loan, and “Mega Backdoor Roth” options available through IRA Financial’s plan design.
2026 Quick Reference Contribution Limits (bookmark this)
- 401(k) employee deferral: $24,500
- 401(k) annual additions cap: $72,000 (excludes catch‑ups)
- Catch‑up (50+): $8,000; age 60–63: $11,250
- SIMPLE deferral: $17,000; catch‑up $4,000; age 60–63: $5,250
- Comp limit for employer calc: $350,000 (All per IRS Notice 2024‑80)
Step 1 — Pick the right plan for your situation
IRA Financial offers four small‑business owner retirement options in one place: Solo 401(k), SEP IRA, SIMPLE IRA, and ROBS, so you can match your structure and hiring plans without switching providers later.
1) “It’s just me (and maybe my spouse). I want the highest limit.” Choose the Solo 401(k)
- Why it wins: Combines an employee deferral (up to $24,500) with employer profit‑sharing, and allows after‑tax contributions for the Mega Backdoor Roth, up to the $72,000 annual additions cap (catch‑ups extra). IRA Financial’s Solo 401(k) plan also includes standard Roth option, checkbook control, and Form 5500‑EZ prep, which removes admin friction.
- Funding options: Traditional (pre‑tax) and Roth deferrals supported. Loans up to the lesser of $50,000 or 50% of your balance.
2) “I have (or will soon have) employees and want simple admin.” Go with the SIMPLE IRA
- Why it fits: Payroll deferrals up to $17,000 per employee, plus required employer match (up to 3%) or 2% nonelective. Easy setup, immediate vesting. IRA Financial supports self‑directed investing if you want alternatives beyond mutual funds.
3) “I want deductible business contributions without employee deferrals.” → SEP IRA
- Why it fits: Employer‑only contributions up to 25% of comp (subject to plan rules), capped by $72,000. Simple to run, but you must contribute the same percentage for all eligible employees. IRAF offers checkbook control or custodian‑directed setups.
Step 2 — Know your real max (with quick rules of thumb)
Employee side (Solo 401(k) & SIMPLE):
- Up to $24,500 (401(k)) or $17,000 (SIMPLE) in 2026. Catch‑ups: $8,000 (50+) or $11,250 (age 60–63) for 401(k); $3,500 (50+) or $5,250 (age 60–63) for SIMPLE.
Employer side (Solo 401(k) & SEP):
- Corporation/W‑2 wages: up to 25% of W‑2 comp (subject to the $350,000 comp cap for 2026).
- Sole prop/LLC taxed as sole prop: use IRS Publication 560 worksheets—your “25%” becomes roughly 20% of adjusted net earnings after half the self-employment tax and the plan deduction itself. (Don’t guess; use the worksheet.)
Overall cap (very important):
- The $72,000 annual additions limit covers employee + employer + after‑tax. Catch‑ups sit on top of that.
Step 3 — If you want Roth firepower, design for it
- Roth options now exist not only for 401(k) plans but also for SEP and SIMPLE plans (SECURE 2.0). Check that your provider supports them; IRA Financial does.
- Mega Backdoor Roth (Solo 401(k)): After employer + employee, you can add after‑tax dollars up to the $72,000 cap, then convert in‑plan to Roth. IRAF’s Solo 401(k) also includes this option.
Step 4 — Timing & compliance (so you don’t lose deductions)
- Adopt your Solo 401(k) by year‑end to make employee deferrals for that year; employer contributions can generally be made by your tax filing deadline (including extensions). Use IRS Pub 560 for exact timing and calculations.
- SEP IRA contributions are due by the business return due date (extensions allowed).
- SIMPLE IRA employee deferrals follow payroll‑deposit rules; employer match/nonelective is due by the business return due date.
- Form 5500‑EZ: One‑participant 401(k)s generally file when plan assets exceed $250,000. IRA Financial includes 5500‑EZ prep with its Solo 401(k).
Step 5 — Put the plan to work with IRA Financial
IRA Financial is built for owner‑operators who want control and compliance:
- Solo 401(k): flat pricing, checkbook control, mega backdoor Roth, loan feature, and free Form 5500‑EZ filing.
- Self‑Directed SEP IRA and SIMPLE IRA: enable alternative assets (real estate, private equity, crypto, metals) with checkbook or custodian control.
- One hub for small‑business retirement with an easy open‑account flow and free consultation.
Quick Chooser: Which plan leaves less money on the table?
- Max dollars, no full‑time W‑2s: Solo 401(k) (best all‑around; Roth + Mega Backdoor + loan).
- You have staff and want ultra‑simple setup: SIMPLE IRA (lower limits but easy and includes employer match).
- Profits vary and you prefer employer‑only contributions: SEP IRA (simple, big deductions, but same % to all eligible employees).
Conclusion on Maximizing Retirement Contributions
Choosing the right retirement plan for your business isn’t just about following IRS rules, it’s about creating a strategy that matches your business, your cash flow, and your long-term goals. By understanding the 2026 contribution limits, you can avoid leaving tax-advantaged dollars unused and build a stronger financial foundation for retirement.
For most solopreneurs, the Solo 401(k) offers the most flexibility and highest savings potential, but SEP and SIMPLE IRAs remain valuable tools depending on your situation. IRA Financial gives you the control, compliance, and expert support to make the process straightforward. The sooner you put your plan in place, the sooner your money can start compounding toward the retirement you deserve.
Frequently Asked Questions
How high can my “employer” contribution really go?
What if I’m age 60–63?
Can I invest beyond index funds?
Action plan for this week
- Choose a plan (likely Solo 401(k) if you’re owner‑only) at IRA Financial
- Run your numbers with Pub 560 worksheets and your CPA.
- Adopt the plan (don’t miss year‑end for deferrals).
- Design Roth/Mega Backdoor if you want tax‑free growth later.
- Book a free consult with IRA Financial to learn more and help with setup.
How to Start a Roth IRA for my Child
The ability to start a Roth IRA for your child largely hinges on whether he or she has earned income, as defined under the Internal Revenue Code. For individuals who have a business and the ability to pay their children for real, business-related work, starting a Roth IRA for a child can be a viable option. If you don’t have your own business, paying your own child is generally not realistic. In that case, you would need to wait until he or she is able to earn income independently through employment or self-employment.
Key Points
- The Roth IRA is one of the most powerful long-term savings tools for young investors
- You can start a Roth IRA for your child, but only if he or she has bona fide earned income
- So long as earned income exists, Roth IRA contributions may come from any source, subject to annual limits
The Power of the Roth IRA
The secret sauce to generating tax-free wealth at retirement starts with the Roth IRA. Mix in time and patience, and you have a powerful long-term strategy. All investments held inside a Roth IRA grow tax-free, and qualified withdrawals are not subject to federal income tax.
To qualify for tax-free Roth IRA withdrawals, the account must have been open for at least five years and the account holder must be at least age 59½, with certain limited exceptions.
Unlike traditional retirement accounts, which are funded with pre-tax dollars, Roth IRAs are funded with after-tax money. While there is no upfront tax deduction, this is generally not a disadvantage for a child earning modest income.
The earlier a Roth IRA is established and funded, the longer the assets have to grow tax-free. For example, if an IRA were established for a 15-year-old and $2,000 were contributed each year until age 70, earning an assumed annual return of 7.5%, the Roth IRA could grow to approximately $1.5 million, all potentially tax-free. By contrast, starting the same contributions at age 35 could result in a balance closer to $330,000.
This example is for illustrative purposes only and assumes consistent contributions and investment returns. Actual results will vary.
Starting a Roth IRA for Your Child
Starting a Roth IRA for a child is easier than ever. Because minors cannot legally own retirement accounts outright, a custodial Roth IRA must be established, with a parent or legal guardian acting as custodian until the child reaches the age of majority under state law.
Once the account has been opened, the child’s earned income for the year may be contributed to the Roth IRA. While the contribution itself may come from a parent, grandparent, or other source, total annual contributions may not exceed the lesser of the child’s earned income or the annual IRA contribution limit in effect for that tax year.
Roth IRA contributions are not tax-deductible and therefore do not reduce taxable income for the parent or child.
For a visual explanation of how Roth IRAs for children work, watch the video below:
The Roth IRA & Child Compensation Rules
In order to pay a child compensation for services, those services must be performed as part of a bona fide employer-employee relationship, and the compensation must be reasonable based on the nature of the work performed.
If you do not operate a legitimate business, you generally cannot pay your child for services. This does not prevent your child from contributing to an IRA; it simply means the earned income must come from another source, such as employment with a third party.
Paying a child to clean their room, do homework, or perform household chores does not constitute earned income for IRA purposes.
All wages paid to a child must be properly documented, reported, and processed through payroll in accordance with federal and state tax laws.
Depending on the business structure, wages paid to a child may be exempt from certain payroll taxes, although income tax reporting requirements still apply.
Revenue Ruling 72-23
Revenue Ruling 72-23 provides guidance on how the Internal Revenue Service evaluates an employer-employee relationship involving a parent and child.
In the ruling, the IRS considered whether wages paid by a father to his unemancipated minor child for personal services rendered as a bona fide employee were deductible as ordinary and necessary business expenses. The ruling concluded:
“Where the facts show that actual services are rendered by a taxpayer's child as a bona fide employee in the operation of the taxpayer's business, and that the compensation paid for such services is reasonable and constitutes an ordinary and necessary expense of carrying on such business, such wage payments are deductible as a business expense for Federal income tax purposes.”
As a result, the child was deemed to have earned bona fide income, making the compensation eligible for IRA contributions, while the business was allowed to deduct the wages as an ordinary business expense.
Key Factors the IRS Considers
- Wages must be paid for services rendered in a trade or business
- Compensation must be reasonable for the work performed
- The age of the child and the nature of the services are relevant
- Payments must reflect a true employer-employee relationship, not a personal allowance
- Parents must be able to substantiate the legitimacy, reasonableness, and business purpose of the compensation
Conclusion
Starting a Roth IRA for a child can be a powerful long-term planning strategy, but eligibility depends entirely on whether the child has bona fide earned income. This is straightforward when a child works for an unrelated employer and receives a paycheck. When parents employ their own children, additional care is required.
If you operate a legitimate business and your child performs real work, such as stocking shelves, assisting customers, or performing administrative tasks, and is paid a reasonable wage, establishing a Roth IRA may be appropriate. However, accounts that appear premature or unsupported by earned income may attract IRS scrutiny.
If your child is too young to work, financial education can still begin early. Using a “practice” Roth IRA example can help children understand the power of compounding and long-term investing, preparing them for responsible saving once they begin earning income.
What is a C Corporation?
A C Corporation is one of several legal entity types recognized for regulatory, tax, and official purposes under U.S. law. A C Corporation differs from other common business structures such as Limited Liability Companies (LLCs), S Corporations, and Sole Proprietorships.
C Corporations can range in size from single-owner businesses to multinational corporations with hundreds of shareholders and directors. This structure is unique because it is a separate legal and tax-paying entity distinct from its owners (shareholders). As a result, C Corporations are generally more complex to operate and maintain than other entity types, but they also provide stronger liability protection.
A C Corporation is formed at the state level and is governed by the corporate laws of the state in which it is incorporated. To form a C Corporation, you must register a business name with the state and file Articles of Incorporation. Most states also require an initial filing fee and ongoing annual or franchise fees.
Benefits of a C Corporation
Several common reasons small businesses in the United States choose to operate as C Corporations include enhanced legal protections and structural advantages. Key benefits include the following:
Capital Raising Capacity
C Corporations can raise capital by issuing and selling stock to investors. The goal is to demonstrate business growth potential so that investors believe the value of their shares may increase over time. This structure is particularly beneficial for businesses that require outside investment or plans to scale, as C Corporations can issue multiple classes of stock and have an unlimited number of shareholders.
Protection Against Liability
Many business owners choose the C Corporation structure to separate personal and business risk. In a sole proprietorship, personal and business assets are not legally separated. If the business incurs debt or is sued, the owner’s personal assets may be at risk.
A C Corporation, however, is a distinct legal entity. Generally, the corporation’s assets are at risk—not the personal assets of shareholders—provided corporate formalities are properly maintained.
Longevity and Continuity
Because C Corporations are independent legal entities, they do not automatically dissolve upon the death, withdrawal, or sale of ownership by a shareholder. Shares may be sold or transferred, and the business can continue operating uninterrupted. In contrast, certain other entity types, such as single-member LLCs, may require restructuring or dissolution depending on state law.
Silver in a Self-Directed IRA
Precious metals have always held up well in times of economic upheaval. Obviously, there's a finite amount of metal on this planet. Unlike dollar bills, you can't just create more of them. This scarcity is a major reason precious metals tend to hold their value over time. Investor and financial commentator, Jim Rogers, has previously stated that certain market downturns rank among the worst of his lifetime, and he has often pointed to silver as a potential safe-haven asset during periods of economic uncertainty.
Gold has always been the first metal people turn to; however, silver may be just as important in today’s world. Not only is silver used in jewelry and eating utensils, but it is also widely used in electronics, solar panels, medicine, and vehicles. Traditionally used as a reward for second place, silver often does not receive the attention it deserves and may warrant a closer look from long-term investors. Over the past several years, the price of silver has experienced notable growth, reflecting both investment demand and increased industrial use. This article will discuss the best way to invest in silver.
Key Points
- Although not always regarded as the top precious metal, silver should not be overlooked
- Using a Self-Directed IRA to invest may be a tax-efficient strategy
- When IRS rules are followed, silver can provide a hedge against economic uncertainty
What is a Self-Directed IRA?
Not all IRAs are the same. A Self-Directed IRA is a type of IRA structure that allows an investor to have greater control over retirement funds. It is a retirement vehicle that permits investment in a broader range of assets, including silver and other precious metals.
One of the primary reasons IRA investors turn to silver, gold, and other metals is to hedge against inflation and rising prices. Like gold, silver is often viewed as a safe-harbor investment during periods of financial stress because it is a hard asset and a store of value. It may also be viewed as an alternative to fiat currencies, such as the dollar or euro, which is why silver has historically drawn interest during inflationary periods.
Benefits of Investing in Silver in a Self-Directed IRA
Investing in silver with a Self-Directed IRA offers multiple benefits. Compared to gold, silver is generally more affordable, making it more accessible to a broader range of investors. Silver also has strong industrial demand and is used across various industries, including electronics, jewelry, and solar technology. Like gold and other precious metals, silver has a limited supply and has historically served as an inflation hedge.
These benefits make silver a popular option for Self-Directed IRA investors looking to diversify their holdings and help protect retirement assets. A Self-Directed IRA also allows investors to diversify beyond precious metals, offering access to traditional investments such as stocks and bonds, as well as alternative assets like real estate.
Tax Advantages of Buying Silver in a Self-Directed IRA
Using a Self-Directed IRA to invest in silver can offer meaningful tax advantages. In general, gains from the sale of IRA-owned silver are not subject to immediate taxation. As long as the asset remains within the IRA, income and gains grow on a tax-deferred basis in a Traditional IRA or tax-free in the case of qualified Roth IRA distributions.
For many investors, a Self-Directed IRA is an effective way to take advantage of long-term, tax-advantaged compounding.
What Types of Precious Metals and Coins Are Allowed?
Under Internal Revenue Code Section 408(m), retirement accounts are permitted to invest in certain U.S.-minted gold and silver coins, as well as specific platinum coins. Retirement accounts may also invest in gold, silver, platinum, or palladium bullion that meets required fineness standards and is held by a qualified trustee or approved non-bank custodian.
Generally, silver bullion must meet a minimum fineness of 0.999. Eligible coins and bullion must be held in the physical possession of a qualified depository or financial institution.
Examples of permitted precious metals include:
- Certain gold, silver, and platinum coins described under 31 U.S.C. Section 5112 and IRC Section 408(m)(3)
- Certain bullion coins and bars that meet IRS fineness requirements
- Precious metals that are held by a qualified trustee or approved depository
The Technical and Miscellaneous Revenue Act of 1998 expanded the rules to allow certain platinum coins and specific bullion, provided all IRS custody requirements are satisfied.
In short, IRA-owned precious metals must meet IRS purity standards and must be held by an approved custodian or depository—not in the personal possession of the IRA owner.
How to Buy Silver in a Self-Directed IRA
Full-Service Self-Directed IRA
A full-service Self-Directed IRA offers investors access to a wide range of investment options beyond those typically available through traditional financial institutions. With this structure, a specialized IRA custodian, such as IRA Financial, serves as the custodian of the IRA and executes investments at the direction of the account holder.
Income and gains generated by IRA-owned silver flow back into the IRA without immediate tax consequences. The custodian also handles required IRS reporting, allowing the investor to focus on investment decisions rather than administrative responsibilities.
Self-Directed IRA LLC with Checkbook Control
A “Checkbook Control” IRA uses an LLC that is owned and funded by the IRA and managed by the IRA holder. This structure can offer greater flexibility and faster execution for certain investments.
However, when investing in precious metals, additional IRS rules apply. IRA owners may not take personal possession of IRA-owned metals, and all precious metals must be held by a qualified custodian or approved depository. Investors considering this structure should ensure the IRA and LLC are properly established and operated in compliance with current IRS guidance.
Conclusion
Precious metals, particularly silver, continue to attract investor interest as a hard asset with both industrial demand and potential inflation-hedging qualities. As part of a diversified retirement strategy, silver can offer long-term value when held properly within a retirement account.
The tax advantages of an IRA make it a compelling vehicle for precious metals investing. Just remember that IRA-owned silver must be held by a qualified depository or financial institution and not in the personal possession of the account holder.
This information is for educational purposes only. Investors should conduct their own due diligence and consult with qualified financial or tax professionals before making investment decisions. Ultimately, it is up to you and your advisor to determine whether investing in silver aligns with your retirement goals.
Airbnb in an IRA: Will it Trigger UBTI?
An Airbnb in an IRA allows investors to use retirement funds to pursue short-term rental real estate while still benefiting from tax-advantaged growth. As you are probably aware, you can use retirement funds to invest in real estate. Of course, you must adhere to all the IRS rules, especially UBTI, when doing so. A lot depends on the type of property you own, how you earn income from it, and what type of plan you are investing in. Holding an Airbnb in your IRA has become more popular. Many investors are looking into short-term rental options, as opposed to annual commitments. Both types of investments offer the investor many advantages.
Investing in Real Estate with an IRA
Real estate has always been the most popular alternative asset for self-directed retirement account investors. These types of accounts, such as the Self-Directed IRA and Solo 401(k) plan, allow one to use retirement funds however you see fit [so long as all IRS rules are followed]. By self-directing, you are in control of your investment decisions and not limited to what a bank or other financial institution offers. So long as you don't run afoul of the IRS rules, you have greater flexibility than just investing in the usual stocks, bonds and mutual funds.
Why is Real Estate so Popular?
For one, everyone needs a place to live, work and even build on. Plus, there's only so much land to develop on this great planet. Eventually, the demand will far outweigh the supply, making it a great investment. Real estate, and other alternatives, also provide diversity in your retirement holdings. As the saying goes, don't put all your eggs in one basket. Investing everything in the stock market is not the smartest decision you can make. On the other hand, neither is putting all of your retirement funds into one real estate property.
Of course, real estate is not without its risks. Everyone remembers the housing crash just over a decade ago. However, smart investors didn't panic. Instead, they started buying up even more properties at a much better price. They knew that real estate would bounce back and it quickly did [although past performance is never guaranteed].
There's also a myriad of real estate investment options, whether it be commercial or residential. For those looking for a steady stream of income, a rental, even a short-term rental like Airbnb, is very popular. Some might look into fix and flips, while others will buy and hold. Investing in raw land for future development may suit other investors.
Lastly, real estate is a hard asset, unlike stocks, which are considered "paper" assets. It's great for one's mindset that you can physically see and touch an investment. However, when investing through an IRA, the IRA owner cannot personally perform work on the property. You also have the power to improve your property personally [when investing outside of an IRA]. Upgrading the appliances will help you receive more rent in an income property. Landscaping will raise the asking price of your flip house. Sweat equity is something real estate investors know all about.
Holding an Airbnb in Your IRA
Airbnb, along with other platforms like VRBO, have become increasingly popular across the globe. The next logical step is to look at these properties as retirement assets. Weekly and/or monthly rentals have the potential to bring in more income than an annual renter. The downside is that you need to keep the space occupied most of the time to keep the money coming in. Of course, there may be more expenses, as the rental needs to be cleaned after each stay [and managed by third-party, non-disqualified persons]. Having a full-time tenant might be a better option for many people. However, an Airbnb property can pay huge dividends.
This is especially true if you are in a desired area. Live close to the beach? Maybe you are near a theme park or arena. Perhaps, you are on the outskirts of a major city, where you can charge a little more per stay. As mentioned earlier, you need to stay within the IRS rules.
Book a free call with a self-directed retirement specialist
- Review your self-directed retirement options
- Learn about investing in alternative assets
- Get all of your questions answered
Prohibited Transactions & Disqualified Persons
The first rules, especially when real estate is involved, are the prohibited transaction rules. Specifically, it's important to note the disqualified persons facet of the Internal Revenue Code (IRC). Essentially, any investment (including an Airbnb property) cannot involve a disqualified person. Your Self-Directed IRA is the only thing that can benefit from the investment held within. Disqualified people include yourself (the IRA owner), your spouse, your lineal ascendants and descendants and entities controlled by such persons.
A disqualified person cannot benefit from an IRA-owned asset, including real estate. This means one cannot utilize the Airbnb property, nor can they earn a salary doing work for such property. Some examples:
- You cannot personally live in a property your IRA owns.
- You're not allowed to rent it out to your father, daughter or their spouses.
- You can't hire your son-in-law to manage the property.
What About UBTI?
Unrelated Business Taxable Income, or UBTI, is a tax imposed on certain investments made with retirement funds, which includes real estate. This tax, which can go as high as 37%, can make an investment tax-inefficient. In regards to real estate, the UBTI can apply in different scenarios. The first one is when you borrow money to purchase a property [such as through a non-recourse loan, which may create unrelated debt-financed income (UDFI)]. Also, if your real estate investments go far enough to make it a business, you might get hit with the tax. There is one other situation where the UBTI comes into play when holding an Airbnb in your IRA.
The IRS does not offer much guidance on the use of Self-Directed IRAs and short-term rentals, such as Airbnb, especially with respect to the UBTI rules [and determinations are often based on the facts and circumstances of each situation].
Payments for the use or occupancy of rooms and other space that render services to the occupant don’t constitute rent from real property.
Rent from Real Property:
- The use or occupancy of rooms in hotels, boarding houses, or apartment houses furnishing hotel services,
- Tourist camps or tourist homes,
- Motor courts or motels,
- Occupancy of space in parking lots, warehouses, or storage garages
Generally, services are considered rendered to the occupant if they are primarily for his/her convenience. Supplying maid service is an example of this kind of service. However, furnishing of heat and light, cleaning public entrances, exits, stairway and lobbies, etc. are not.
Therefore, it may appear that as long as you do not provide daily maid services or other convenience features like a daily breakfast [or other substantial personal services], the investment should not be treated as a hotel or motel type of income stream. As a result, it may generate rental income that’s exempt from the UBTI tax rules [although this determination is highly fact-specific].
Internal Revenue Code 469
An argument can be made that under IRC 469 – the rental income can be deemed active and not a passive investment if the average rental activity is less than seven days. Although, IRC 469 applies to the ability to take deductions under the passive activity loss rules, [and does not directly govern UBTI under IRC 512], an argument can potentially be made that if under 469 the activity is deemed active, it could be subject to the UBTI tax.
However, on the flip side, Schedule E, which is only required to be filed if the activity is passive and not active (Schedule C), does not have a day threshold as well and only focuses on level of ancillary activity. Hence, when doing short-term rentals with your Self-Directed IRA, it is important to be mindful of the potential application of the IRC 469 rules and the seven day threshold. Unfortunately, there is no direct guidance from the IRS under IRC 512 on short-term rentals.
As always, be sure to speak with a UBTI expert before engaging in such investments. Remember, the IRA Financial blog is for educational purposes, and you should always consult with a financial advisor before making any investment.
Should You Hold an Airbnb in Your IRA?
Of course, this can only be answered by each individual investor and their financial goals. Real estate will always be a popular investment. Short-term rentals, like Airbnb, are here to stay. Those with a prime location can earn some serious income for their retirement plan. Of course, you have to be wary of the IRS rules to make sure the tax benefits of the IRA are not compromised.
Investing in Farmland in an IRA
Did you know you can invest in farmland in an IRA? It’s possible to hold farmland as part of a long-term retirement strategy—while staying fully compliant with IRS rules.
The IRS does not limit what assets you can hold in an IRA; instead, it restricts how certain assets are used. Under the Internal Revenue Code, IRAs are prohibited from investing in:
- Life insurance contracts
- Collectibles, such as artwork, rugs, antiques, gems, stamps, coins (with limited exceptions), or alcoholic beverages
- Prohibited transactions under IRC §4975, which are transactions that directly or indirectly benefit you, your spouse, or other disqualified persons (including lineal ascendants and descendants)
Because of these rules, you cannot personally farmland owned by your IRA or lease it to yourself or other disqualified persons. However, your IRA can purchase farmland and lease it to an unrelated third party at fair market value or hold the land purely as an investment.
When structured properly, all rental income and any appreciation from the farmland flow back into the IRA on a tax-deferred (Traditional IRA) or tax-free (Roth IRA) basis. This makes farmland an attractive option for investors seeking diversification through tangible, income-producing assets they understand and trust.
How to Invest in Farmland in an IRA
To invest in farmland, you must use a Self-Directed retirement account, which allows alternative assets beyond stocks, bonds, and mutual funds.
There are generally two ways to structure a farmland investment within an IRA:
Traditional Self-Directed IRA
The IRA directly purchases and owns the farmland. All income and expenses must flow through the IRA, and the investment must be managed through the IRA custodian.
Self-Directed IRA with Checkbook Control (also known as a Self-Directed IRA LLC)
In this structure, the IRA owns a single-member LLC, and the LLC purchases the farmland. As manager of the LLC, you gain greater control and flexibility while maintaining IRS compliance. This structure can also provide limited liability protection and streamline investment-related transactions.
If you are self-employed or own a business with no full-time employees other than yourself and your spouse, you may also be able to invest in farmland using a Self-Directed Solo 401(k). Certain investors may also qualify to use a Self-Directed SEP IRA, depending on their business structure.
Book a free call with a self-directed retirement specialist
- Review your self-directed retirement options
- Learn about investing in alternative assets
- Get all of your questions answered
Important Compliance Considerations
When investing in farmland through an IRA:
- All expenses (taxes, maintenance, insurance) must be paid directly by the IRA or IRA-owned LLC
- All income must return to the IRA
- You and other disqualified persons may not use, live on, or personally benefit from the property
- Leases must be at fair market value and with non-disqualified third parties
Following these rules is essential to preserving the tax-advantaged status of your retirement account.
Get Started with IRA Financial
With a Self-Directed IRA, you can invest in farmland—and other alternative assets—for one flat fee. IRA Financial specializes in helping investors take control of their retirement savings while remaining fully compliant with IRS regulations.
If you want to learn more about investing in farmland with your retirement account, give us a call, schedule a consultation, or complete one of our contact forms. One of our IRA experts will guide you through the process and help you invest freely and retire confidently.
Top 5 Private REITs Investing Platforms 2026
If you’re looking to diversify beyond stocks and bonds, private REITs are one of the most powerful tools you can add to your portfolio. Pairing them with a self-directed IRA can take that strategy even further by adding tax advantages. In this article, we’ll walk through the top platforms for private REITs, what to watch for, and how a self-directed IRA, like one from IRA Financial, can enhance your retirement planning.
What Are Private REITs and Why They Matter
Private REITs, or Real Estate Investment Trusts, are investment vehicles that pool money to buy real estate such as multifamily housing, office buildings, retail centers, or industrial parks. Unlike public REITs, they are not traded on stock exchanges. They offer investors:
- A way to diversify beyond stocks and bonds
- Potential income from property distributions
- Access to institutional-grade real estate typically out of reach for individual investors
These are considered alternative assets, meaning they behave differently than traditional investments and can help reduce portfolio volatility when used strategically.
Who Private REITs Are Best Suited For
Private REITs make the most sense for investors who:
- Have a long-term horizon of five years or more
- Want income along with diversification
- Can tolerate lower liquidity since these aren’t traded daily like stocks
- May qualify as accredited investors, depending on the platform and deal
Risks and Considerations
Before investing, it’s important to understand:
- Liquidity: You usually can’t sell shares instantly, and some platforms require holding periods
- Accreditation: Many private REIT opportunities are only open to accredited investors
- Transparency and regulation: Private REITs don’t have the same reporting requirements as public REITs, so due diligence is essential
- Fees: Management and performance fees vary widely. Always check each platform’s fee schedule
Top 5 Private Real Estate Investing Platforms
Here are the top platforms to consider in 2026, listed in no particular order.
1. Fundrise
Best for: Broad access with low minimums
Fundrise allows investors to participate in private real estate through REIT-like funds with entry points as low as $10. It’s approachable for both accredited and non-accredited investors and offers diversified portfolios of private real estate assets. Annual fees are typically around 1 percent of assets under management.
Why it stands out:
- Very low barrier to entry
- Multiple portfolio strategies including income, growth, and balanced
- User-friendly platform with strong educational resources
Investor suitability: Retail and accredited investors
2. RealtyMogul
Best for: Income-focused private REITs with moderate minimums
RealtyMogul offers both project-level real estate deals and private REITs, including income-focused funds with minimum investments around $5,000. Some opportunities allow redemption after a specific holding period.
Why it stands out:
- Access to individual properties and private REITs
- Monthly or quarterly dividend distributions
- Reasonable investment minimums
Investor suitability: Investors seeking moderate entry points into private real estate
3. Yieldstreet (now Willow Wealth)
Best for: Alternative investment exposure including private REITs
Yieldstreet, rebranded as Willow Wealth, offers private market alternatives across multiple asset classes, including real estate funds that function similarly to private REITs. Some offerings require accredited status, but some managed funds are accessible with lower minimums.
Why it stands out:
- Wide range of alternative investment opportunities
- Managed fund options for diversified exposure
- Established platform with millions invested cumulatively
Investor suitability: Accredited investors seeking diversified alternatives
4. CrowdStreet
Best for: Institutional-grade commercial real estate
CrowdStreet provides accredited investors direct access to commercial real estate deals, including funds resembling private REITs. Minimum investments are typically higher, around $25,000, and the platform focuses on large-scale properties with institutional sponsors.
Why it stands out:
- High-quality institutional property placements
- Transparent underwriting
- Robust reporting tools
Investor suitability: Accredited investors with higher capital to deploy
5. Blackstone BREIT (via Private Placement)
Best for: Large-scale, professionally managed private REITs
BREIT, or Blackstone Real Estate Income Trust, is accessed through private placements and financial intermediaries. It is one of the largest private REITs and provides diversified exposure to commercial real estate managed by an experienced team.
Why it stands out:
- Managed by one of the largest alternative asset firms
- Broad property diversification
- Long track record compared with many private REITs
Investor suitability: Accredited and institutional investors comfortable with larger minimums
Book a free call with a self-directed retirement specialist
- Review your self-directed retirement options
- Learn about investing in alternative assets
- Get all of your questions answered
Real Estate Investing Inside Your Self-Directed IRA
A major advantage that often gets overlooked is placing private REITs inside a self-directed IRA with a custodian like IRA Financial.
Why it matters:
- Tax-advantaged growth: Real estate income and gains can grow tax-deferred in a Traditional IRA or tax-free in a Roth IRA
- Diversification within retirement: You’re diversifying not just your taxable portfolio but also your retirement assets
- Control and flexibility: A self-directed IRA lets you hold private REITs not available through standard brokerages
This approach is particularly useful for investors looking to combine income-producing alternative assets with long-term tax growth.
FAQs About Private REIT Investing
Q: Are private REITs liquid?
A: Generally no. They are less liquid than publicly traded REITs, and redemptions are typically limited to certain periods or minimum holding terms.
Q: Do I need to be accredited?
A: Many private REITs, especially larger deals, require accreditation. Some platform-wide funds, however, are available to non-accredited investors.
Q: What are typical fees?
A: Fees vary by platform and fund structure. They may include management, performance, or organizational fees. Always review each offering’s fee schedule.
Is a Self-Directed IRA Right for You?
If you’re serious about retirement diversification and want to leverage tax advantages, a self-directed IRA through IRA Financial can be a powerful way to hold private REITs alongside other alternative assets. With this structure, you keep control and flexibility while allowing your retirement savings to grow efficiently.
Take Action
Explore how a self-directed IRA can help you invest in private REITs and other alternative assets. Request a consultation with an IRA Financial New Accounts Specialist to understand your options, requirements, and how to get started. Strategic, flexible, and tax-efficient investing could make your retirement look very different.
This article is provided for informational purposes only and does not constitute investment, tax, or legal advice. Any rankings, ratings, or opinions expressed reflect the views of IRA Financial based on internal research, listed criteria, and publicly available data at the time of publication. Rankings are subjective and may not be suitable for all investors. Readers should independently evaluate all options and consult with qualified advisors prior to making financial decisions.