Real estate investment is recommended by Solo 401k plan provider

How Solo 401k plans and real estate investments can help women prepare for retirement

According to CNBC, BlackRock - a survey asset management firm - reported that only 53 percent of surveyed women have started saving for retirement, compared to 65% of surveyed men with the same answer.

The slower start, coupling with a lower average earning and lack of investment growth, can put a strain on women’s retirement savings. Women also tend to live longer than men, which means they need a much more substantial savings to last their life time.

Another reason for women’s lower savings is because of the gap in their career. Often, women are the caregivers in their family. They are often forced to take a part time or contract based position to have time to raise their children. These positions come with certain disadvantages, such as the lack of an employer-sponsored retirement plan.

However, that doesn’t mean that women have to sit out on retirement planning during those years. Sense Financial recommends people without an employer-sponsored retirement plan to look into individual retirement accounts, such as the Solo 401k plan or the self-directed IRA LLC. These retirement plans allow individuals to save up for their retirement without an employer-sponsored plan in place, while taking advantages of tax-deferral benefits.

The Solo 401k plan, for example, is designed for self-employed business professionals without any other full time employee. Independent contractors, freelance consultants, and physicians with private practice can qualify for this plan. As the sole participant of the plan, the plan owners enjoy many benefits such as the self-directed option, high contribution limits, and choices of investment assets. The self directed 401k plan is allowed to invest in real estate, among many other alternative options.

BlackRock also finds out that women are less likely to invest their money for fear of risk. The average woman keeps 68% of her wealth in cash and cash equivalent, while an average man only keeps 59% in cash. Keeping their portfolio in cash is not a smart move. Not only does cash not grow on their own, women risk losing their money to rising inflation as well.

To address this issue, Sense Financial, a trusted plan provider of the Solo 401k plan, recommends women to look for safer but more profitable investments beyond traditional assets such as cash, stocks, and mutual funds. Real estate investment can be an answer for their risk-aversion investment style. While a rental property or note investing can return close to double digit a year, they are also considered more secure than stock investment. The reason is that, with real estate investment, often the property itself acts as collateral. Investors can always sell or foreclose the property to recover some of their loss if needed.

Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.

To learn more about Solo 401k, please visit sensefinancial.com