Business Starting Grants

Using a 401k Rollover To Finance a Small Business?

I have heard that you can take a non-taxable rollover from an existing 401k to invest in a new company. The procedure would be to establish a 401k plan at the new company, rollover all or part of your old 401k, then use the assets to purchase stock in the new company. Do you feel that this is a) Legal b) Sensible

Public Comments

1. That's not quite how it works but it can be done though I would never reccomend actually doing it. It's no different than what the folks at Enron did and look how that worked out for them. Diversity is the key for retirement assets and if they are invested in the new company then you are not diverse. There are a myriad of other reasons but this one should be enough.