ROBS (Rollover for Small Business)
I wanted to check with the group to see if anyone has an opinion or ever used ROBS (Rollover for Small Business) to purchase a business such as a laundromat? This would be an alternative to traditional financing.
A ROBS allows you to withdraw funds from your 401k without penalty to buy a business as long as you comply with the rules set forth by the IRS.
I spent 15 years in corporate America and was fortunate enough to contribute to a 401k. Life changes and have been a self-employed Contractor for over 10 years and no longer contributing to my 401k and am about 15 years from retirement. So I worry that the funds in my retirement are at the mercy of the daily stock market fluctuations and I may be left with nothing.
That being said, I feel like if I bought a fairly stable business like a laundromat, my retirement funds would be better protected, I could pay myself an annual salary and hopefully see appreciation in the business when it’s time to sell. So any gains lost in the stock market would ideally be offset by the annual salary I take as well as any appreciation in the value of the business.
While I have done my due diligence on this and have spoken to ROBS specialists, I would really appreciate any feedback on this strategy and would be very interested to know if anyone has ever used a ROBS. Thank you.
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