Menu Close

IRA Financial Group Blog

Start a Business with Your Retirement Funds!

ROBS - start business with retirement funds
2 Minute Read

ROBS – How to Start a Business with Your Retirement Funds

One of the first items on the list of a fledgling business is to raise capital so that the business has funds to operate. When forming a new business, the owners of that business will likely invest their own funds into the business to start it up. In many cases, however, those starting a business do not have sufficient funds – either initially or for the long-term operation of the business . As a result, entrepreneurs typically look to investors for additional funding.

Instead of looking outside the business for additional funding, another option to consider is using one of the owner’s retirement funds to invest in the business.
A business owner may use his or her retirement funds to invest in either a new or existing business, and, more importantly, may use an IRA to fund a business tax-free and without penalty!

However, the steps taken to accomplish this must be compliant with IRS guidance and ERISA law, and therefore it is imperative that you retain qualified tax professionals who have the expertise to develop an investment structure that is fully compliant with IRS guidance and ERISA law.

Work with IRA Financial Group

IRA Financial Group’s tax attorneys will work with you directly to develop a fully IRS and ERISA compliant rollover business startup solution (ROBS) customized to your individual business, financial, and retirement needs. If you have retirement funds, such as an IRA or 401(k) and wish to invest in a business, then consider the 401(k) business funding structure over a Self Directed IRA, Self Directed Real Estate IRA, or a Solo 401k.

With a 401(k) Business Funding Structure, you can now use your IRA or Solo 401(k) funds to invest in a new business, purchase a business or franchise, or finance a new or existing business tax-free. You will have the ability to take part in the business and earn a reasonable salary.

Benefits of the ROBS Solution

Additional benefits of the ROBS solution include the ability to:

  • Help grow your business.
  • Recapitalize and/or expand your business.
  • Maintain a qualified retirement plan and help save for the future.
  • Diversify your retirement investment portfolio by investing in your own business as well as stocks and mutual funds.
  • Attract and retain quality employees by offering a benefit not commonly found in small businesses.
  • Take advantage of high contribution limits under a 401(k) Plan.
  • Enjoy tax benefits generated by using a 401(k) Plan.

At IRA Financial Group, you will work directly with our certified tax and ERISA attorneys to establish an IRS and ERISA compliant structure that works best for you and your business.

Any traditional 401(k) plan, including a Solo 401(k) plan, may be used under this structure to finance a new or existing business tax-free. However, this kind of structure is not available to a Self Directed IRA, Self Directed IRA LLC or Self Directed Roth IRA.

Get in Touch

If you have questions about the ROBS solution and would like to learn more about the legality of the structure, call IRA Financial Group directly at 800-472-0646. You can also contact a certified tax specialist, or discover more about the structure in our ROBS learn more pages.

We are happy to help you.

Related Articles