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ROBS – Rollovers for Business Startups

What ROBS Means

ROBS (Rollovers for Business Startups) is a method that allows entrepreneurs to use retirement savings to fund a new business or franchise without triggering early withdrawal penalties.

How It Works

Funds from a 401(k) or similar retirement plan are rolled over into a new corporation’s qualified retirement plan.
The new plan invests in the business by purchasing stock.
The business receives the cash to operate and grow.

Advantages

Access to capital without traditional loans
No early withdrawal penalties or taxes
Can be used for start-ups, acquisitions, or franchise purchases

Risks and Considerations

Requires careful compliance with IRS rules
Involves potential loss of retirement funds
Professional guidance is strongly recommended

Legal Disclaimer

This information is for educational purposes only and is not financial, tax, or legal advice. Always consult qualified professionals before using retirement funds for business purposes.

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