IRA and 401K Roll Over
Many people can invest into real estate using hard earned IRA and 401K money! You can enjoy the tax efficient benefits while diversifying your portfolio into cash-flowing real estate.
There are some steps that are required to make this happen. Please read the following carefully. While not complicated, it is important to know how it works.
A rollover is a process of transferring funds from one qualified retirement plan, such as a 401k or 403B, to another retirement account. The most common reason for a rollover is to move retirement funds from a previous employer’s plan to a new retirement account. There are two types of rollovers: Direct Rollovers and Indirect Rollovers (also known as 60-Day Rollovers).
A direct rollover happens when the custodian of the retirement account from which you want to move funds sends a rollover check or wire directly to the custodian of the new retirement account. With this type of rollover, there are no taxes withheld from your rollover payment.
Indirect Rollover (60-Day Rollover)
An indirect rollover is when you receive a distribution from a retirement account and deposit it into another retirement account within 60 days. Once you receive the rollover check from your transferring custodian, you have 60 days to deposit these funds into another retirement account. Failing to complete this transfer within 60 days will classify the rollover amount as a distribution by the IRS, and you’ll have to pay taxes on the distribution.
To learn more about these rollovers, visit the IRS website.
Please chose the option below that describes you:
STEP 1: Open an account with a Self Directed IRA (SDIRA) custodian. The first step is to get an account open with a Self Directed IRA custodian.
Here are a few Self-Directed IRA (SDIRA) custodians:
- Alto IRA* (Integrated with CalTier Platform)
- Equity Trust
- IRA Financial
- The Entrust Group
- Rocket Dollar
- New Direction Trust
- Midland Trust
- Millennium Trust
- Advanta IRA
- Horizon Trust
- Pacific Premier
*CalTier platform is integrated with ALTO IRA. If you would like to open up an ALTO IRA account, click here.
There are other Self Directed IRA (SDIRA) custodians that you may use.
NOTE: Most custodians charge a setup fee, an administration fee, and a transaction fee. As these fees will vary, please contact the SDIRA custodian for a list of fees. If you use Alto IRA and invest $5,000 or more with CalTier, we will reimburse these fees for you.*
NOTE: SDIRA Custodians may limit what you can invest in and who you can invest with.
You will need to follow the process that your chosen custodian gives you. This can take a couple of weeks or days, depending on the custodian of your IRA and your new Self Directed IRA custodian.
You will want to ask for a “Direct Trustee-to-Trustee Transfer from the resigning brokerage firm to the new Self-Directed IRA Custodian. A “Indirect Transfer,” where a check is mailed to your personal residence will have 20% Federal Tax withheld, and you have only sixty days to deposit the check or face a fully taxable distribution of all assets and forever lose the IRA status.
Once you have funded your SDIRA account, please follow the steps below:
STEP 2. If you do not have a CalTier account please create one here. If you already have an account please log in.
STEP 3. When you are asked to decide the account type please select “Retirement Account”. If you have an ALTO IRA account select this option.
STEP 4. Continue through the process and at the payment method step please select “Retirement Account” again or Alto IRA if you have one (make a note of the wire information!)
STEP 5. Non ALTO – Once you have completed these step please pass the wire information to your SDIRA custodian and the amount you committed. Once they have wired the monies and they have settled in our escrow account, your investment will be complete.
ALTO Accounts – On the next page please click “Continue”. You will then be taken to your ALTO log in page. Log in and confirm the investment. ALTO will wire us the funds, and once complete that’s it!
*The partnership benefits between CalTier and AltoIRA are based on the ‘Pro’ account terms. The following fees apply:
- Account opening fee: $250
Partner Investment fee: $10
You will be charged the account opening fee by Alto of $250 when setting up your account. CalTier will reimburse the account fee to AltoIRA at least 60 days after a new account opening so long as you invest a minimum of $5,000 into the CalTier Fund 1, LP offering. If your new account meets the minimum investment requirements, Alto will reimburse the account opening fee to you. Additionally, if you maintain a minimum of $5,000 per year in the CalTier Fund 1, LP offering then CalTier will continue to cover the $250 yearly account fee at no cost to you
CalTier will also cover the $10 investment fee for CalTier Fund 1, LP investments. CalTier will not cover any other fee such as wire, account closure or investments into non CalTier offerings. You are free however to make as many of those as you wish.
The Pro Account offers optional features with additional fees which CalTier will not be covering:
- Checkbook one time fee: $500 (add-on)
- Outbound wire fee: $25 (if needed for non-CalTier offerings)
- Account closure: $50
That’s great news! Since your self-directed IRA (SDIRA) is already established and funded all you need to do is create an investment in the CalTier platform and then instruct your SDIRA custodian to wire the money.
Please follow these steps:
1. If you do not have a CalTier account create one here. If you already have an account please log in.
2. Once you have an account and are logged in please follow the prompts to invest. When you are asked to decide the account type please select “Retirement Account”. If you have an ALTO IRA account select this option.
3. Continue through the process and at the payment method step please select “Retirement Account” again or Alto IRA if you have one (make a note of the wire information!)
4. Non ALTO – Once you have completed these step please pass the wire information to your SDIRA custodian and amount you committed. Once they have wired the monies and they have settled in our escrow account your investment will be complete.
5. ALTO Accounts – On the next page please click “Continue”. You will then be take to your ALTO log in page. Log in and confirm the investment. ALTO will wire us the funds and once complete thats it!