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How We Helped Matt & Jess Shipley
See what 21 years of experience and a commitment to providing the BEST solutions looks like in this client case study. A Self-directed 401(k) plan give you the freedom to invest in real estate and other alternative assets. No approvals, no red tape, no hidden fees - just instant & full control of your funds.
The Brief: Meet the Shipleys
The Couple
Matt & Jess Shipley are a married couple looking to take control of their retirement savings and invest in real estate.
Current Assets
Matt has a 401(k) from a previous employer, while Jess has an IRA.
Their Goal
Use retirement funds to purchase an Airbnb investment property that can eventually become their retirement home.
Challenges: Lack of Control
1
Traditional Limitations
The Shipleys were concerned about the lack of control they had over their existing retirement accounts, which were invested in traditional stocks and bonds.
2
Better Returns
They felt real estate would provide better returns and more control over their financial future.
3
Tax Benefits
They were interested in potential tax benefits and wealth-building opportunities of self-directing their retirement funds.
Challenges: Restricted Access
1
Lost Opportunities
Matt & Jess Shipley had seen other investors lose out on opportunities due to custodians restricting access to funds.
2
Lengthy Approvals
Some custodians have required processes that can take weeks to approve and release funds.
3
Timing Issues
These delays prevent investors from acting in a timely manner on good investment opportunities.
Challenges w/ Their IRAs
Borrowing Limitations
Matt & Jess Shipley were interested in potentially borrowing funds for personal use.
Investment Restrictions
They wanted to make purchases outside of traditionally approved investment types.
Financial Freedom
They loved the idea of truly becoming their own bank, increasing the flexibility and utility of their retirement funds.
Full Control: The Solution
NO Approvals
Make investment decisions without waiting for third-party approval.
NO Red Tape
Eliminate bureaucratic processes that slow down your investment opportunities.
NO Hidden Fees
Transparent cost structure with no surprise charges.
Same Day Access
Immediate access to your funds when you need them.
The Retirement Reality
82%
of Americans
have to work longer than planned.
92%
of Americans
fear they'll need to delay retirement.
7%
Average Returns
Traditional 401(k) average annual return
Solution: Self-Directed 401(k) Setup
Account Consolidation
We worked with Matt & Jess Shipley to set up a new self-directed 401(k) plan, allowing them to consolidate their previous retirement accounts.
Full Control
This gave them complete control over their investment decisions without custodian restrictions.
Increased Contribution Limits
The new structure raised their contribution limits and tax benefits for both Matt and Jess.
Business Contribution Benefits
1
2
3
1
Tax Advantages
Significant tax benefits for retirement planning
2
Higher Limits
Increased contribution capacity
3
Business Match
Up to 25% of business income as match
Matt & Jess Shipley's business can contribute up to 25% of its income as a match to their self-directed 401(k), significantly increasing their retirement savings potential beyond personal contribution limits.
Control Over Investment Type
1
1
Property Ownership
The 401(k) owns the Airbnb property, not Matt & Jess Shipley personally
2
2
Income Flow
All rental income flows back into the SD 401(k)
3
3
Higher Returns
Potential for returns exceeding their traditional 401(k)'s 7% average
Less Risks, More Returns
The Airbnb property Matt & Jess Shipley are interested in is listed for $400,000 and projected to appreciate 5% annually. After 5 years, the property value is estimated to reach $509,000, a 27% increase on the asset alone.
Flexible Leverage Options for Matt & Jess Shipley
1
2
3
1
Full Access
Matt & Jess Shipley maintain access to funds for future opportunities
2
Diverse Investments
Ability for the Shipleys to pursue various investment strategies
3
Personal Purchases
Options for Matt & Jess to acquire vacation homes or make other purchases
Growth Potential Timeline
1
Now
Matt & Jess Shipley's initial investment of $400,000 in Airbnb property with 16% projected annual returns.
2
5 Years
The Shipleys' property value grows to $509,000 through 5% annual appreciation, plus rental income returns.
3
10 Years
Continued growth through compound returns and potential for Matt & Jess to make additional property investments.
Roth Conversion Flexibility
Traditional to Roth
Matt & Jess Shipley can convert funds from traditional to Roth IRA for tax-free growth potential.
Strategic Timing
The Shipleys can convert during advantageous tax years to minimize conversion costs.
Tax Planning
Matt & Jess Shipley should work with tax professionals to optimize their conversion strategy.
The Setup Process
1
Complete Application
Fill out and submit the 401(k) setup application form.
2
Contact Current Providers
Reach out to Matt & Jess Shipley (IRA) and previous employer (401k) to understand their transfer processes.
3
Account Creation
SD Retirement Plans creates your empty, checkbook-controlled 401(k) in 7-10 business days.
4
Fund Transfer
Transfer funds from existing accounts to your new self-directed 401(k).
Contribution Mechanics
1
1
Business Sponsorship
Your business sponsors the 401(k) plan, creating a separate entity with its own EIN.
2
2
One-Way Contributions
Income flows from business to 401(k), but not back to business - like through a "brick wall with a one-way slot."
3
3
Personal Contributions
Matt (over 50) can contribute $31,000 annually; Jess can contribute $23,500.
4
4
Business Match
Business can contribute an additional 20-25% of income as a match.
Maximum Annual Contributions
With both personal contributions and business matching, the Shipleys can potentially contribute over $100,000 annually to their self-directed 401(k), accelerating their retirement savings significantly.
Investment Property Ownership
Who owns the Airbnb property?
The 401(k) owns the property, not Matt & Jess Shipley personally. This is a critical distinction that determines how the property can be used and how income flows.
How does income from the property work?
Any income generated from the Airbnb flows back into the SD 401(k), not to Matt & Jess Shipley personally. This allows for tax-advantaged growth within the retirement account.
Can they eventually live in the property?
Yes, but not immediately. Special structures like a preferred LLC with common shares would need to be set up to allow them to eventually use the property as their retirement home without triggering prohibited transactions.
Property Investment Strategy
Matt & Jess Shipley identified an undervalued property in Unspark owned by another realtor. They plan to make an offer with seller financing, potentially with a 3-5 year balloon payment, and either continue as an Airbnb or sell for profit after building equity.
Financing Options
Fund Management After Sale
Continuous Investment
After selling a property, Matt & Jess Shipley should reinvest funds promptly rather than letting them sit idle in the 401(k) checking account.
Brokerage Options
The Shipleys' 401(k) can open a brokerage account for temporary fund placement, such as a high-yield savings account (5-5.7%).
Next Property
Matt & Jess Shipley can use these funds to purchase their next investment property, continuing the growth cycle.
Administrator vs. Custodian Roles
Third-Party Administrator
Sets up the empty, checkbook-controlled 401(k) structure for Matt & Jess Shipley. Process takes 7-10 business days regardless of dollar amount being moved.
Custodian
Traditional retirement accounts require custodians who may restrict access. Matt & Jess Shipley's self-directed 401(k) eliminates this middleman for direct control.
Consultant
After setup, the administrator transitions to a consultant role for the Shipleys, available to answer questions about their investment strategies.
Advanced Contribution Options
Elective Contributions
Standard personal contributions ($23,500 or $31,000 with catch-up) that come from income generated by Matt & Jess Shipley's business.
Non-Elective Contributions
Advanced option allowing Matt & Jess Shipley to make contributions from other sources, entering as after-tax/Roth contributions for tax-free growth.
Tax Considerations
Matt & Jess Shipley should consult with tax professionals to optimize contribution strategies based on their specific situation.
Transfer Process Considerations
1
Understand Current Provider Processes
Each financial institution has different requirements for transferring funds. Some may be simple online processes while others might require additional documentation. We'll guide Matt & Jess Shipley through their specific provider's requirements.
2
Prepare for Potential Resistance
Some custodians may make transfers difficult because they're losing your business. Be prepared for potential paperwork requirements.
3
Transfer Options
Most institutions offer wire transfers (24-hour for ~$30) or standard ACH transfers (3-5 business days, typically free). We'll discuss which option is best for the Shipleys' situation.
4
Partial Transfers
You don't need to transfer all funds - move only what you need for your immediate investment and keep the rest where it is if you're satisfied with performance. Matt & Jess Shipley can customize their transfer strategy based on their investment goals.
Take Control of Your Retirement Today
Financial Freedom
Break free from traditional retirement limitations and take control of your financial future.
Higher Returns
Invest in assets you understand with potential for greater returns than traditional market investments.
Act Now
Schedule your free consultation with Matt & Jess Shipley to learn how a self-directed 401(k) can transform your retirement strategy.