What $250K in a 401(k) Looks Like vs. 5 Paid-Off Rental Properties
For decades, the traditional plan for retirement has been simple: work for 40 years, contribute to your 401(k), and hope the stock market delivers. While it can work for some, it often leaves retirees facing uncertainty, market swings, and income that is far from guaranteed.
At SDIRA Wealth, we believe there’s another path. One that turns your hard-earned money into tangible, income-producing assets that provide stability, tax benefits, and long-term security.
The Side-by-Side Comparison
Let’s look at what happens when you have $250,000 in a 401(k) versus owning five fully paid-off rental properties.
401(k)
Volatility: Subject to stock market swings that can reduce your balance at any time
Income Potential: Withdrawals are limited by safe withdrawal rates, often around 4% per year — that’s about $10,000 annually on $250K
Tax Strategy: Withdrawals are taxed as ordinary income, and required minimum distributions are mandatory after a certain age
Legacy Planning: Beneficiaries inherit the account, but tax implications can reduce the actual amount they receive
5 Paid-Off Rental Properties
Volatility: Values may fluctuate, but income remains steady as long as properties are occupied
Income Potential: At $1,800 per month per property, you could earn $9,000 a month, or $108,000 annually, without selling the properties themselves
Tax Strategy: Benefit from depreciation, expense deductions, and potential 1031 exchanges to defer capital gains
Legacy Planning: Properties can be passed down to the next generation with a step-up in basis, minimizing capital gains for heirs
Why Real Estate Wins in the Long Run
The key difference comes down to control and predictability. With a 401(k), your retirement income depends on market conditions and withdrawal rules you cannot control. With fully paid-off rental properties, you own the asset outright, control the income, and benefit from multiple wealth-building levers — monthly rent, appreciation, equity preservation, and tax advantages.
Designed for Stability and Growth
At SDIRA Wealth, we help investors replace uncertainty with a plan. By strategically acquiring new construction rental properties in strong markets, you can create an income stream that supports your lifestyle without depending on the stock market’s mood.
This is not just about today’s numbers. It’s about creating assets that:
Produce predictable monthly income
Increase in value over time
Offer tax-efficient strategies to protect and grow your wealth
Provide a lasting legacy for your family
The Takeaway
Your retirement should not depend on guesswork or the hope that the market will cooperate. With the right plan, you can turn a lump sum into an income-producing portfolio that works for you every month in both good markets and bad.
Five paid-off rental properties can give you the stability, flexibility, and freedom that a traditional 401(k) simply cannot match. The sooner you start building, the sooner you can enjoy a retirement that is not only secure but truly yours.