Financing Your Business From Your Retirement Accounts
Because people have always thought of their retirement plans as “untouchable”, the practice of using retirement funds as a source of business capital may seem unusual.
Actually, the federal pension laws allow entrepreneurs to transfer funds from a qualified plan, like a 401(k)or an IRA, into the Pension Transfer Trust Plan. The Pension Transfer Trust Plan is then allowed to purchase stock in a closely-held corporation as long as the IRC and other rules are followed.
With the significant accumulation in 401(k) plans in the last ten years, the concept of using retirement money to fund a new business has become increasingly popular.