Q: I am looking to purchase a business, and I found a company that is offering to use my 401K and IRA funds to set up the company. It sounds like a good deal. Do you have any information on this type of business?
A: I’ve read all about them and in theory it seems like a brilliant deal. I have not done this personally but I do know from speaking with professionals that it’s not simply a generic program applicable to every situation. I am ALWAYS wary of these so called “loopholes”. The key is that the plan itself and the transaction must be set up and completed precisely. As such, I would suggest that you have your accountant and/or attorney review this possible option for you.