Where Your Money Sits: 401(k)s, IRAs & Self-Directed Accounts

For many people, retirement accounts hold most of their wealth outside their home. How those accounts are set up decides what you can actually invest in. This page explains the basics in plain English. It is educational only, not investment or tax advice. Talk to a CPA or qualified tax professional before you move or invest retirement money.

From the founder

Qualified accounts are often where a lot of someone's wealth sits outside of real estate. If all of your money is in your current employer's 401(k), your options are limited to whatever that plan allows, which is usually Wall Street investments.

You'll probably need some cash outside your current employer's 401(k) to invest in these opportunities. You can start small and set aside money to invest over time. You could take a loan from your 401(k). You could borrow from a life insurance policy. How you do it is entirely up to you, and again, this is not investment advice. But it will be important to have some money outside your current company 401(k).

If you have scattered IRAs and 401(k)s from prior employers, you can often move them and get access to these opportunities through self-directed custodians. If that's you, I suggest you research how to do it. I have an account at Equity Trust and a My Solo 401k account, both of which allow investing in alternative assets.

There are a lot of considerations here. At one point my IRA bought a single-family home, and that was not a good idea for me: I lost the ability to use depreciation in my favor, and I couldn't use leverage effectively inside that account. Later I invested in a private credit syndication that provides cash flow only, and it sits in my Roth account, so I'm not being taxed on that income.

Getting money outside your current 401(k)

Saving over time. The simplest route: set aside money in a regular taxable account and add to it until you're ready. It's slower, but it doesn't put your retirement savings or insurance at risk.

401(k) loans. If your plan allows loans (not all do), the IRS limits the maximum to the lesser of $50,000 or the greater of $10,000 or 50% of your vested balance. Loans generally must be repaid within 5 years, in substantially equal payments made at least quarterly. If you leave your job with a loan outstanding, the plan may offset the unpaid balance from your account. That offset can be taxable unless you roll over the amount by your tax-return due date, including extensions, and early-withdrawal penalties may apply. Money you've borrowed also stops growing in the plan while it's out.

Policy loans on permanent life insurance. Whole life and other permanent policies can build cash value you may be able to borrow against. Loans accrue interest, and any unpaid loan plus interest is subtracted from the death benefit. If the loan balance grows larger than the cash value, the policy can lapse, which can cause both a loss of coverage and an unexpected tax bill. Get an in-force illustration from your insurer before borrowing.

Moving old 401(k)s and IRAs to a self-directed account

Key self-directed rules

Which assets fit inside which accounts

Your situation will differ, so run the numbers with a tax professional.

Beware of self-directed IRA fraud

The SEC, NASAA, and FINRA have warned that self-directed IRAs can attract fraud. Custodians generally don't evaluate the investments or the promoters, so a legitimate custodian doesn't make an investment legitimate. Be wary of unsolicited offers, promises of "guaranteed" returns, and custodians you can't verify. Independently check the promoter and the asset before you invest.

The founder's accounts

The founder holds accounts at:

Disclosure: TheAltMap's founder holds accounts at Equity Trust and My Solo 401k. These are plain links, not referral links. They're named for transparency, not as recommendations.

Related pages

Sources (checked October 14, 2026)

Disclaimer

This page is for educational purposes only and is not tax or investment advice, or legal advice, and nothing here is a recommendation. Retirement-account rules are complex, and mistakes can be costly. Talk to a CPA or qualified tax professional before moving or investing retirement money.