The Exact Investment “Stack” We’re Using to Retire Early (Not Just Rentals)

0:00Ashley Kehr:Most people spend 40 years working so they can stop working. But what if you could build a life where work is optional way before 65?

0:09Tony Robinson:Ashley and I are pulling back the curtain today on our actual retirement plans, what we're doing, why we're doing it, and what we wish we would have known sooner because no one handed us a roadmap. And if you're a real estate investor trying to figure this out on your own, well, then this episode is for you.

0:26Ashley Kehr:This is the Real Estate Rookie Podcast. I'm Ashley Kehr.

0:29Tony Robinson:And I'm Tony J. Robinson.

0:31Ashley Kehr:So I have actually put together a list of questions for Tony and I to actually go through to share our own journey saving for retirement. And hopefully this will help a lot of you be able to plan for your own retirement. So Tony, the first thing I kind of want to go over is the beginning. When were we first introduced to retirement? And I think for me, it was when I graduated college and I started my first job and I got a 401k with that first job.

1:09Tony Robinson:Yeah, I think same for me. And I'll just, you know, add context to the entire audience that between me and Ashley, Ashley is definitely the resident retirement expert between the two of us. And she educates me on a lot of these things. But yeah, I think it was for me too. When I graduated college, actually my first job after college, I did not offer a 401k. And that job did not last very long. But like my first real big boy job after college, I think was a few months afterwards. And I got a 401k and I had to like sit there with my other co-workers who were recent college grads. And we're trying to figure out like, okay, how do we put these percentages there?

1:43Tony Robinson:And what does this mean? But yeah, it was a first job after college with the 401k.

1:46Ashley Kehr:Yeah, my first job only lasted six months, my accounting job before I quit and went into property management. But I, from that first job, I had very little vested. So a lot of times a 401k, you have to work there for so many years before they'll actually give you like the employer contribution of it. so it was very little and I ended up when I left there I ended up rolling it over into a Roth IRA still really didn't know a lot about retirement at all it was actually a friend that told me and helped me go through that I didn't really know a lot about it and I actually had a financial advisor then so after I had left that job the new investor I started working for with the property management company, had a financial planner.

2:34Ashley Kehr:I was like, this is probably a good idea for me. And I went to him and all I had was my little money. Honestly, it was probably like$500. I don't remember. But it rolled over into that. And then we just did some financial planning of what to do for the future. And I probably had the financial advisor for maybe five years. uh one thing he did do for us was set up uh 529 plans for the kids which we'll talk about that more later but other than that i really didn't use the financial planner at all i think it was like 700 to a thousand dollars just to like meet with him and go over stuff and definitely was not worth the money and then my second job i didn't even get uh any benefits at first i worked there for several years.

3:28Ashley Kehr:I was part time. I worked whenever I wanted. And it actually came to a point where I asked for benefits and I got health insurance and then I got 401k. And it was a, I believe it was a 3 % match and I had to contribute 3 % for them to, to give me that match, which is pretty common. So to Tony, do you remember at Tesla at all when you would, did they have a match at all?

3:53Tony Robinson:Yeah. So Tesla was slightly different, But like, I'll go back to that first job. I actually worked for Target before working at Tesla. And, and Target did have a match. I remember what it was. It was so, you know, so many years ago at this point. But I remember I just invested up to that match, like whatever the match was, that's what I invested up to. So I maxed it out there. And I can't remember what it was, but that's what I did at Target.

4:15Ashley Kehr:So kind of our next investment for retirement, which we really probably didn't think of it at the time, but was purchasing our rental properties, my long-term properties and your short-term rentals. So, Tony, at the time that you were going to ignore your long-term rentals because you sold them, but your short-term rentals, when you were purchasing those, did you have anything in your mind thinking about this, I will use these properties for retirement in any sense? Were you thinking about that down the road?

4:46Tony Robinson:I mean, that was really the main reason that I got into real estate was because my dad growing up always said, unless you want to get up and go to a job every single day until you're much, much older, you've got to have some assets that pay you on a regular basis. And he's like, real estate is one of the best ways to do that. So that was just like drilled into me very, very early on. So like, I don't know if I thought about it as retirement, but for me, it was just always having that financial freedom, I guess, more so. And that's what pulled me into real estate to begin with.

5:15Ashley Kehr:Yeah, that was definitely my framing and thinking too, but it was more like now, like how can these assets give me the financial freedom now as in retired, but we all know landlording, short-term rental operations, a lot of that isn't, you know, quiet retirement sailing off into the sunset. there's still a lot of work to do, but I never thought about what I knew I wanted to hold properties long-term, but I never actually saw what mortgage pay down appreciation and an increase in rental income every year can actually do to just be this, a ton of equity by the time I'm you know, 65, you know, hopefully a ton of equity before that.

6:02Ashley Kehr:I have to say that it probably took me about eight years before I actually really started strategizing what properties I was keeping and which ones I was selling to think about later on in life. So I wanted to think about which properties would have a lot of appreciation where I would have options with them. Where before, when I first started investing, it was a cashflow play. I didn't care if they appreciated. I just wanted cashflow. Well, some of those properties were like$20 ,000 duplexes, but they cashflowed a lot, but they were headache properties. They were in areas that saw no appreciation.

6:43Ashley Kehr:I was super, super lucky where I bought them at the right time and I sold them like just after COVID when prices went crazy. And so I was able to sell them and get rid of them at a good time. But even if I would have held on to them for a long time, the appreciation just wouldn't be what it was for other areas where I went for higher dollar amount properties and better areas, better school districts and things like that. So as I've started to like weed out my portfolio, I put a lot of thought into down the road in the future. Like I want fallible assets that I have a easy exit strategy. I they'll have a lot of equity built up into them and I can tap into that at any time that I need to.

7:35Ashley Kehr:Tony, what about you? Have you kind of changed or pivoted your strategy at all, thinking more about the future when you're ready to just retire?

7:46Tony Robinson:Not necessarily. I mean, I think we've been fortunate enough that, you know, I think the long-term prospects of all the markets we've invested into, like we'll probably continue to see pretty good appreciation, like, you know, a good chunk of our portfolios in California, right, which typically does pretty well. So I don't know if we have anything that we've purchase where I question its long-term viability in the portfolio. There are some properties that are just like headaches for other reasons, but I truly think if I hold all these properties for 30 years, we'll probably be in a pretty good position in terms of loan pay down and appreciation.

8:19Ashley Kehr:We're going to take a short break, but when we come back, we're actually going to go through the retirement stack. And this is from Scott Trench from BiggerPocketsMoney. This is going to tell you multiple options of what you can do for retirement and his recommended order of how to invest in these things. So we'll be right back. When you buy your first rental property, there's usually a moment right before you pull the trigger where your brain starts spiraling a little. What if I'm making a mistake? What if I can't figure this out? What if this whole thing becomes way more complicated than I expected?

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10:29Tony Robinson:Do you ever notice how every passive investment somehow turns into a very active lifestyle? Active spreadsheets, active phone calls, active stress. Here's a better question. What if you could buy brand new construction homes, 10 % below market value, in the best markets across the country without making real estate your second job. That's exactly what Rent to Retirement does. They're a full-service, turnkey investment company handling everything for you. In some cases, investors get 50 % to 75 % of their down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter.

11:07Tony Robinson:If you want to do the same, visit biggerpockets.com slash retirement to learn more. Most deals don't fall apart because of the numbers. They fall apart because of the financing. You find a property that cash flows. The deal makes sense. But then the lender looks at your personal income, your tax returns, your debt to income ratio, and suddenly the deal doesn't qualify. That's the disconnect. Because as investors, we're not buying based on our W-2. We're buying based on the asset. That's why Host Financial offers DSCR loans designed for real estate investors, where qualification is based primarily on the property's income, not your personal finances.

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12:11Ashley Kehr:OK, welcome back. So we got into a little bit about Tony and I's real estate for retirement, but we also want to talk on other investment vehicles that you can do for retirement because it is important to diversify. And there are a lot of advantages to using some of these other retirement vehicles. I was listening to a podcast the other day with Scott Trench and Mindy Jensen on BiggerPocketsMoney. And Scott went through and put together his retirement contribution order of operations. So this was for specifically a high-income W-2 household, but really I think this would work for any W-2 income household.

12:52Ashley Kehr:And if you are self-employed, you're not going to get an employer 401k match, but you could still go through these orders of operations in some sense, but obviously you're not going to be able to have access to all of them. But also there will be other options for you too, because you are self-employed and don't have a 401k, you know, employer option available to you. Okay. So the first one is take your employer 401k match, because this is in a sense of free money, but I mean, technically it's worked into your compensation package, but you should take it. Don't leave it on the table because that's money loss.

13:33Ashley Kehr:So, you know, sometimes you don't have to contribute to you just automatically get the match from your employer. So that's even better. But that is step number one is to take that.

13:45Tony Robinson:Step number two, and this is the one that like literally changed my life, but it's the Employee Stock Purchase Program or ESPP, where companies allow you to buy stock at a discounted rate. So again, I spent the majority of my W2 career working at Tesla. And I was very fortunate that during that time, the company did incredibly well in the stock market. And we were able to purchase from every paycheck that would take out however much you wanted to allocate, but you could buy Tesla shares at a 15 % discount. So just imagine the amount of wealth you're able to build of every single paycheck. I think we were paid like bi-weekly.

14:22Tony Robinson:So it was at 26 times a year. I was able to go out and buy Tesla stock at a 15 % discount while the stock was also increasing at this pretty rapid pace. And gosh, I want to say, I might be confusing the bonuses with the employee stock purchase, but I want to say that there was a fixed price that you would be able to buy it for for the quarter. So even if it went up a little bit, you even got maybe a bigger discount. But either way, for me, that's where I put the majority. I think I was just putting into match at Tesla as well for the 401k. Actually, I don't even know if Tesla offered a match. I really can't remember because I know most of my money was going into ESPP because that's where I saw the biggest opportunity.

15:03Tony Robinson:But guys, when I lost that job, it was all of that stock that I've been piling into for years and years at that point that allowed us to have the foundation to build our portfolio and go full-time into real estate. So truly one of the best returns that I've ever had on any investment.

15:20Ashley Kehr:Yeah, I've never worked anywhere that had that as an option. So the next one, step three, is to max out your HSA. Okay, so I believe not everyone can actually get an HSA. You usually have to be in a high deductible plan. But with the HSA, you put in pre-tax money and it grows tax-free. And if you use it for medical, it's tax-free when you pull that money out too. So it's like a triple tax advantage. So this is great to save as you get older. You may have more medical expenses in your elderly age and you'll have all this money to pull out tax-free to be able to use. Also, even now, as you have medical things that come up, but to pay your deductible for your high deductible plan and other medical bills that you may have that you can use that money for.

16:20Ashley Kehr:But that's a huge advantage because it's like a triple savings on taxes right there.

16:25Tony Robinson:And said number four is to max out your dependent care FSA. I've actually never used this before, and I've had kids almost my entire life now at this point, and I've never used this. Are you using a dependent care FSA at all, Ash? Have you used one in the past?

16:39Ashley Kehr:No, I'm not. So it's like a Pre-tax, employer-sponsored. So again, if you have a W-2 job and your employer has to offer this, but it's used to pay for child care expenses.

16:51Tony Robinson:My brother-in-law works for a global tire distribution company and they offer an FSA. And that's how he pays for his babysitters through that account or for his nanny through that account. So just a good way to save on taxes on something you're going to spend money on anyway.

17:07Ashley Kehr:Okay. So step five is to max your 401k contributions. So as of 2025, or if anyone's still filing those tax returns for 2025, the max contributions you could do is up to 23 ,500. So this is pre-tax contributions. And I mean, that's a lot of money for a lot of people to be able to put$23 ,500 after you've already contributed to a lot of these other things too. So that was, this would be just maxing out your 401k.

17:45Tony Robinson:I'll let you take maybe six and seven, just because I feel like I can't speak confidently to the IRAs.

17:51Ashley Kehr:Okay. Then the next thing is the Roth IRA, but this is, if you are high netcom earner, you're not eligible for an IRA. So for a single head of household, you have to be$153 ,000 or under. You can't make more than that. If you're married filing jointly, it has to be under$242 ,000 to be able to contribute into the Roth IRA. The Roth IRA is where you contribute after tax income and then your money grows tax-free. One thing I really like about the Roth IRA is that really at any time, unless you're using like an employer sponsored plan, they may not allow this. But if you just go to like Vanguard, Fidelity, open your own account, what you contribute, you can pull out at any time tax-free and penalty-free because you already paid taxes on that money when you put it in there.

18:49Ashley Kehr:So you want a down payment for a property and you have the money that you've contributed over the years in a Roth IRA, so you've contributed$50 ,000, maybe it's grown to$70 ,000, you could pull out$50 ,000 of that and use it for a down payment on a rental property. So that's what I like about the Roth IRA is you can still access that money without having to pay any penalties or fees. If you do make over that amount of money and aren't eligible for a Roth IRA, there is something called a backdoor Roth IRA. And first of all, I'm going to urge you to go over and listen to this episode of Bigger Pockets Money.