How to Fund Your Own Startup Using Retirement Accounts

The first requirement to start a business is capital. Forget about having a business idea; capital should be on the forefront. In most cases, a startup will require that you invest your own money. As it often happens, you never have adequate capital to start the business and keep it operating till it makes the first profit returns. If you are stranded on where to get extra capital, there is good news for you.

This is a good time to use your retirement funds. It even gets better because you can use IRA for a tax free business startup and face no penalties. The only thing you have to worry about is being compliant with ERISA and IRS laws. Tax professionals will be able to take you through this hurdle and you will have your business running sooner than you thought.

Steps to invest with a self directed Roth 401k:

  • Get a competent tax attorney
  • With their help, develop a business proposal that will meet both ERSA and IRS laws
  • Choose a self directed Roth 401k funding structure
  • Bingo! You have secured funding for your new business from your retirement account

Advantages of using Roth 401k to finance your startup:

  • You will be able to start a business from your own capital and it is all tax-free
  • You do not have the burden to repay debts for borrowed capital. You start your business on a clean slate and you have higher chances of growing it into a successful brand
  • With high IRA contributions, your Roth 401k business funding structure opens adequate capital to start a relatively big business
  • It gives you a way to diversify your retirement plan. This opens to you other money-making avenues other than letting your retirement package stay put till the time you require it. Your future is more secure with a business as long as you have a great business idea. You can grow the package to fully cover all unforeseen financial uncertainties.
  • There are more tax benefits whenever you choose Roth 401k funding plan
  • You will earn a reasonable salary that will keep trickling your way as long as the business is running

You see, your retirement package is a business capital you can tap into. Do not be stranded with your new business idea. Go to tax experts and find how you can use your retirement account to start a business. It never gets as easy as using your own funds to start a business.