Fund a business with my existing employer 401k | ROBS

QUESTION: Can I fund a new or existing business with funds from my existing employer 401k plan?

ANSWER: Yes current employer 401k funds may be used to funds a ROBS (rollovers as business start-ups) provided the following is satisfied. Contributions to 401k plans are typically made up of salary deferral (also referred as employee contributions) and profit sharing contributions (also referred to as employer contributions). Elective deferrals under a 401(k) plan are subject to more restrictive provisions than profit sharing amounts. While the employer may allow employees to transfer the employer contributions to another 401k plan or IRA, elective deferrals generally may not be distributed before one of the following triggering events occurs:

  • death,
  • disability,
  • attainment of age 591/2,
  • severance from employment, or

plan termination.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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