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The Benefits of the ROBS Plan

When it comes to using retirement funds to buy or finance a business that you or another “disqualified person” will be involved in personally, there is only one legal way to do it and that is through the Business Acquisition Solution, also known as a Rollover Business Start-Up (ROBS).

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How the ROBS Solution Works

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An entrepreneur or existing business owner establishes a new C Corporation.

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The C Corporation adopts a prototype 401(k) plan that lets participants direct the investment of their plan accounts, including in employer stock (“qualifying employer securities”).

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The entrepreneur elects to participate in the new 401(k) plan.

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As permitted by the 401(k), the entrepreneur directs a rollover or trustee-to-trustee transfer of retirement funds from another qualified retirement plan into the newly adopted 401(k) plan.

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The entrepreneur then directs the investment of his or her 401(k) plan account to purchase the C Corporation’s newly issued stock at fair market value ( i.e., the amount that the entrepreneur wishes to invest in the new business).

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The C Corporation utilizes the proceeds from the sale of stock to purchase an existing business or to begin a new venture.

What makes IRA Financial different

Clients

IRA Financial Group’s tax and ERISA specialists have helped more than 12,000 clients self-direct their IRA and invest $4 billion in alternative assets, such as real-estate.

Books

Founder of IRA Financial Group and former tax and ERISA attorney, Adam Bergman, has published seven books to help investors self-direct their individual retirement account.

Forbes

Find IRA Financial Group on Forbes! Adam Bergman is a frequent contributor to Forbes.com and an official member of the Forbes Financial Council.

Some advantages of ROBS

  • Save Money

    The primary advantage of establishing a ROBS solution is to be able to use your retirement funds to invest in a business you will be personally involved in without having to pay tax the retirement funds you wish to use as a distribution to tax and potentially penalty.

  • Invest in Yourself

    The ROBS solution allows one to invest their retirement funds in a business that will be actively run by the retirement account holder. As a result, one is essentially investing their retirement funds in themselves rather than on Wall Street.

  • Diversification

    There is a growing sentiment amongst financial advisors, especially after the 2008 financial crisis, that in order to protect your retirement funds from a market downturn, your retirement funds should be well diversified. One can generally not eliminate investment risk completely, but one can manage your level of risk.

ROBS Plan

ROBS Benefits

ROBS benefits

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Earn a Salary

In order for one to be a participant of a 401(k) Plan, one needs to be an employee of the business, which adopted the plan.

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Benefit from Having a 401(k) Retirement Plan

One of the best ways for you to save toward your own retirement and ensure your future security is through an employer-sponsored 401(k) plan.

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Matching Contributions

Many employers will match a portion of your savings: It’s like passing up free money if you don’t participate.

Wall Street Journal logo
“What about your IRA, including rollover IRA? You need to look at state law, advises tax attorney Adam Bergman of IRA Financial Group. ‘If you have a judgment against you and you don’t file for bankruptcy, most states will still protect your IRA…’”

CNN Money logo
“Adam Bergman…gets several calls a day from clients looking to invest their retirement funds in real estate. ‘Our average client…is looking to buy one or two properties. After 2008, they didn’t trust Wall Street. They wanted hard assets.’”

USA Today logo
“Jeff Brown…transferred roughly $50,000 from his workplace 401(k) account to purchase homes to fix up and sell, partnering with a few other investors. He uses a self-directed IRA that he set up through IRA Financial Group in Miami Beach, Fla.”

12k+ Customers Love IRA Financial

“Without the IRA Financial Team, my lifelong dream of owning this Insurance Agency would not be possible. From the first moment I spoke to a specialist, I had the confidence in IRA Financial this could happen. Also, you made yourselves available to the Banking Attorneys immediately. You helped my wife and I put together a very large Transaction using the funds in our 401K to do this…we are very GRATEFUL this was done and to make new friends at the same time.”

Wes, General Ins. Agency Inc.

“IRA Financial Group guided me through my entire ROBS process. They had great pricing and were very helpful. I would recommend them to everyone.”

Gaming Hub

“It was really easy to setup and it was really easy to get in touch with the attorneys to ask questions about setting it up. Thank you all again as I can use my 401k for my real estate business.”

Jared “Cy” Bornes, VA

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