IRA Investments?

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February 24, 2025

by a searcher from Clemson University - College of Business and Behavioral Science in Charleston, SC, USA

Has any used IRA to invest in business? Is this possible or expensive to setup?

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Reply by a searcher
from University of Tennessee in Nashville, TN, USA
Easiest way to understand using personal IRA funds for starting/acquiring a business is to look on Guidant Financial's website. Guidant Financial is a leading administrator in helping individuals use retirement funds to acquire a business. I personally have not used them. They help structure the proper Rollover for Business Start-ups (ROBS). Compliance involves having an operating C-corp, rollover participants are bona fide employees, a qualified 401k plan available to all employees, and several other important recurring compliance requirements.

If you are asking if you can use IRA funds (self-directed IRA) to invest in someone else's business, yes. There are compliance issues in that arena, too, and numerous self-directed IRA administrators can assist you with the proper compliance there if you have an interest.

In both cases, you will need third-party assistance to set-up the systems and avoid a very painful tax consequence from non-compliance.
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Reply by a searcher
from DePaul University in Chicago, IL, USA
^redacted‌ I'm in the process of making use of ROBS for an initial acquisition. If you don't have a lot of cash laying around and don't plan to have investors, it's a good vehicle as long as you understand all of the nuances that a vendor like Guidant Financial doesn't fully explain upfront unless you ask a lot of questions. In my case, I'm using an IRA that I hadn't yet converted into a Roth IRA. Once an IRA has been converted, it's no longer eligible for ROBS. Be aware that many people have strong opinions for and against ROBS, many of whom have limited knowledge. Make sure you do your own research from credible sources. I personally understood ROBS much better after speaking with attorneys specialized in ROBS.
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