Rollover for Business Startup (ROBS)

[Jeff McMahan]

I am going to be leaving my company in a few months and will have to roll over my 401k. I am interested in Rollover for Business Startup (ROBS), but I am currently struggling to find any good information on the topic. I would love to use a portion of my 401k as seed money for my REI (+/- $50K), can anyone point me in a direction to find more information? I have started research Self-Directed IRA's, but because I will be an employee of my startup, that option is out. Any suggestions?

I will be rehabbing single family homes.

Thanks

[Brian Eastman]

@Steve Brown

The ROBS plan is not designed for passive holdings such as rental property.  In order to establish such a program, the business funded by the plan needs to be an active trade or business such as retail, food service, real estate construction, etc.

You could potentially establish a self-directed IRA and fund it with a rollover from a prior plan. The IRA could then invest in real estate. All expenses and income must go through the plan, however, and you cannot benefit or take a salary personally in any way. This is simply a means to diversify your retirement savings into a different asset class such as real estate.