How Real Estate Investors Are Using Retirement Accounts to Diversify with Alternative Income

In today’s uncertain markets, traditional retirement strategies—401(k)s, IRAs, mutual funds—aren’t always delivering the reliability investors expect. As a result, many are turning to alternative assets to diversify and protect long-term wealth. One increasingly popular strategy: using retirement accounts to invest in private real estate funds and other income-generating vehicles.

Whether through a self-directed IRA (SDIRA) or custodial platforms like Schwab and Fidelity, investors are gaining access to income-focused real estate investments—all while maintaining the tax advantages of a qualified retirement account.

Why Use Retirement Accounts for Alternative Investments?

Retirement accounts offer several built-in benefits—chief among them tax-deferred (or tax-free) growth. When paired with consistent, contractual income from real estate-backed loans or funds, these accounts become a powerful tool for building wealth outside of the stock market.

Here are some of the biggest advantages:

• Tax Efficiency: Income generated inside the IRA is not taxed until distribution (Traditional IRA) or not at all (Roth IRA).
• Diversification: Alternative investments reduce reliance on public equities and bonds.
• Stability: Real estate-backed investments are often less volatile than traditional asset classes.

What Types of Real Estate Investments Are Eligible?

Many investors use retirement accounts to invest in:

• Mortgage funds
• First trust deed investments
• Private REITs
• Crowdfunded real estate platforms
• Direct fractional ownership

The key is to work with a custodian or platform that supports alternative investments and allows for real estate allocations.

Platforms That Make It Easy: Schwab and Fidelity

For those who prefer working with well-known institutions, custodians like Schwab and Fidelity have made it easier than ever to invest retirement capital into real estate-backed funds.

Here’s how it typically works:

1. Open a Self-Directed IRA: This may be done through a custodian that specializes in alternative assets or through a brokerage account with specific permissions.
2. Transfer or Rollover Funds: Move existing IRA or 401(k) funds into the new account.
3. Subscribe to the Investment: The custodian executes the investment on your behalf once all documentation is approved.
4. Receive Monthly or Quarterly Distributions: Income generated from the investment flows back into your IRA, preserving tax benefits.

What Investors Should Watch For

While the process is relatively straightforward, there are a few things to keep in mind:

• Custodian Compatibility: Not all custodians handle private investments. Make sure yours does.
• Timing: Transferring funds between custodians can take time. Start the process early if you’re planning to invest by a specific date.
• Prohibited Transactions: The IRS has strict rules about “self-dealing” and using IRA funds for personal benefit. Always consult your tax advisor.

Conclusion

Using a retirement account to invest in real estate-backed income strategies is no longer just for ultra-high-net-worth investors. With platforms like Schwab, Fidelity, and specialized custodians now supporting these transactions, more investors are unlocking the benefits of tax-advantaged, stable income—without sacrificing diversification.

If you’re looking to reduce your reliance on stocks and bonds, tapping into real estate through your IRA might be the smartest move you make this year.

About TaliMar Financial and TaliMar Income Fund

TaliMar Income Fund I offers investors the ability to participate in the rapidly growing demand for private real estate debt. The fund is comprised of a diversified portfolio of short-term loans secured primarily on residential single family and multi-family properties throughout California. The fund manager, TaliMar Financial, was established in 2008 and has successfully funded over $500 million in loans.  Investors in the mortgage fund include high net worth investors, family offices, and private equity funds who are seeking consistent monthly income, the security of real estate, and the tax benefits of a mortgage fund structured as a real estate investor trust. 

Disclosure: This advertisement is for informational purposes only and does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can only be made by the Private Placement Memorandum (“PPM”) and related subscription documents. Any investment in TaliMar Income Fund I involves significant risk. You should not enter into any transactions unless you fully understand all such risks and have independently determined that such transactions are appropriate for you. Business Purpose Loans arranged through TaliMar Income Fund I, LLC (DFPI CFL License No. 60DBO-137778).