401k Rollover for Business Startups (ROBS) by Guidant Financial
The ROBS structure isn’t new — in fact it’s been an option for years — but many financial advisors and stock brokers aren’t aware of these investments because they don’t provide sufficient profit for their institutions. Essentially, you’re investing in yourself. Without loan interest to pay, you can make money sooner rather than later. And unlike the stock market this is an investment you can control. This tried-and-true structure is a fast, legal funding option that’s been in use since the Employee Retirement Income Security Act became a law in 1974.
Nav's Verdict
7/10
Bottom Line
If you have at least $50,000 in a rollable retirement account, this could cost significantly less than other lending options.
Pros
ROBS is a unique product that allows you to borrow against your own rollable retirement account. With no interest, you will be able to pay yourself back when you want. Essentially, you're investing in yourself.
Cons
You must have a C-Corp. You must have at least $50,000 in pre-tax funds in your 401k, 403b, Keogh, TSP, SEP, or Traditional IRA. Monies in a Roth IRA are unavailable. There is a $4,995 service fee.
Qualification requirements
Rollable Retirement Account
Must have at least $50,000 in a rollable retirement account.
Qualified Account Types
Rollable, pre-tax funds in your 401k, 403h, Keogh, TSP, SEP, or Traditional IRA retirement accounts. Cannot fund from a Roth IRA.
C-Corp Requirement
Guidant’s ROBS structure exclusively utilizes a C Corporation (C Corp.) business structure to meet the compliance requirements of ERISA and Internal Revenue code.
Reviews
Reviews Disclosure: The responses below are not provided or commissioned by the credit card, financing and service companies that appear on this site. Responses have not been reviewed, approved or otherwise endorsed by the credit card, financing and service companies and it is not their responsibility to ensure all posts and/or questions are answered.