Today, the times have changed. Instead of living a peaceful post retirement life from their hard earned savings, people are now thinking of investing their retirement money in new business so that their money grows further. Research suggests that 1 million people start a business in America per year. People have started using the funds from their 401k plans to start a new business without attracting tax penalties and other consequences of debt.
Under the Employment Retirement Income Security Act, you can transfer your retirement funds for a usable capital that can be used for business investments. Even if a person has about $40,000 in his retirement account and he is not currently employed by any organization, he can qualify for the Small Business Administration recognized approach where the funds can be used for purchasing a franchise or an existing business. The funds can also be used for start up expenses such as purchasing property or furniture or working capital such as paying salaries or also business expansion such as introducing new franchises.
If you think that you are ready to explore this new financing option, then you should be sure that you consult a financial expert who will guide you through the whole process. This financing option is good if you have accumulated enough funds in your retirement account. You can start a new business where you first establish a C corporation and then this new corporation has a retirement plan. The funds are invested in this retirement plan and the new plan purchases the corporation's stock.
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Pauline Go is an online leading expert in traveling industry. She also offers top quality articles like:
Spouse And IRA Contribute
Tax on Roth IRA.
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