Home Advertise Contact Blog Advertiser Login RSS
Newsletter Signup

Your Free Business Opportunity Resource Is Easy To Use
Home-Based Businesses
Choosing a Business Opportunity Growth and Profit Marketing and Sales
Plans and Goals Running Your Own Business Start-Up
Working From Home Entrepreneur Exchange Feature Articles
Opportunity Community Opportunity Focus In The News

Best Ways to Store Data - Do you backup data on your computer each day? If so, congratulate yourself! You’re one of the tiny minority that can sleep easy.

Best Ways To Store Data - According to a 2016 survey, fewer than 1 in 3 computer users back up files on a schedule, whether daily, weekly...

Find Great Business Opportunities - Book-of-the-Month - Author David Alford maintains that “opportunities come everyone’s way,” but few people know what to do when they find one. And in fact, few people actually know how to find the best ones.

That’s why he wrote

Business Opportunity Leads is what you seek?  As with any sales position, fresh, qualified leads are the main key to success - the lifeline to sales and profits.

Business Opportunity Leads - Whether you are selling a business opportunity, a service or physical products - like house paint, your...

Sponsors

STARSCAPES®
Imagine making up to $500 to $1,800 a day! Call or click now see how you can get your business for FREE! (602) 679-0257
Kaeser & Blair Promotional Products
Run Your Own Business. Be Your Own Boss. Earn Great Profit Potential. Start At A Low Cost. Try It For Free! Learn More.
 
Resource Center > Article
Older Entrepreneurs Use Creative Financing to Make the Most of Today’s Business Opportunities
16 Oct 13 Posted by: Kathleen C Lanza
in Featured Articles
Share this Article:

According to the latest Kauffman Foundation report on entrepreneurial activity, the percentage of new entrepreneurs between the ages of 55 and 64 has grown from 14.3 percent in 1996 to 23.4 percent last year, and entrepreneurship among 45-to-54-year-olds is also on the rise. In fact, according to the Bureau of Labor Statistics, those 65 and older have the highest rate of self-employment today.

Kauffman IndexA

Perhaps this is not surprising given that so many of us are living longer and healthier lives than ever before. That coupled with the fact that recent economic challenges have made it nearly impossible for many older people to retire altogether is what is driving this relatively new yet steady trend. Plus, let’s not forget all the newest technologies that now make it easier for anybody to own and operate their own business opportunity, distributorship, licensee opportunity, small franchise or other small business, oftentimes from the comfort of a work-at-home office and with little to no overhead.

For many so-called baby boomers born between 1946 and 1964, having the opportunity to start a small business represents a kind of freedom and independence that they’ve never had before and that they now welcome. For others, it’s become a matter of necessity. Either way, for far too many older people who are on a fixed or dwindling income even relatively reasonable startup costs can make business ownership seem out of reach.

But the picture may not be as dreary as it seems.

For older individuals who want to be business owners and have retirement savings, but who do not have cash in hand, there is an option you may not have heard about.

It’s called a ROBS. ROBS stands for ROllover Business Start-up, and while it does involve tapping into your retirement funds, the rules are a little different when you’re using the money to start a business or buy one. In fact, the ROBS option does not subject you to the same restrictions as would be the case with a self-directed IRA.

Here’s the much simplified version of how it goes…

If you have a 401(k) or IRA funds, the IRS will allow you to roll money over into a new 401(k) for the purpose of business startup or purchase, and it is then used to buy qualifying employer securities in a newly created C Corporation. As the fund’s owner, you are then allowed to be actively involved in the business, to draw a salary, guarantee a business loan and provide jobs for family members working under the auspices of a “family-owned” business.

Yesitshould

Now, one of the upsides to the ROBS approach is that you can use the full amount of the 401(k) money for the business without paying taxes on it at the time and without paying a withdrawal penalty. However, there is a downside. Given that you must be set up as a C Corporation, you may be subject to higher taxes than you would as either an S Corporation or an LLC.

Of course, there are other options other than the ROBS. A safer bet is to simply take a loan from your existing 401(k), which can be as much as half of its value or up to $50,000, whichever is less. However, it will have to be repaid within five years in quarterly payments. In essence, you give yourself a loan, but you’re told when and how you must pay it back.

Or, you can also elect to take a large disbursement out of your account, but only if you’re willing and able to pay the taxes on that money, as well as the 10 percent penalty. And that’s something few people over the age of 55 or so can afford or want to do these days.

While it’s true that buying a business opportunity or starting any small business is a risky venture, the payoff in terms of self-fulfillment alone can make it all worthwhile. If you’re older and do have retirement savings that you’d consider tapping into to get a business going, the key is to find a skilled financial advisor who can educate you on what your options are and then guide you through the process.

Thankfully, for those who are determined to be entrepreneurs and who have the passion and skill set to take a gamble on themselves, no matter what their age, there are creative funding options out there. Just knowing what they are so that you can ask all the right questions is half the battle.

Related Blog Posts
28 Jun 17 Posted by: Kevin James Culp
in Featured Articles

Best Ways to Store Data - Do you backup data on your computer each day? If so, congratulate yourself! You’re one of the tiny minority that can sleep easy.

Best Ways To Store Data - According to a 2016 survey, fewer than 1 in 3 computer users back up files on a schedule, whether daily, weekly...
1 Jun 17 Posted by: Kevin James Culp
in Featured Articles

Find Great Business Opportunities - Book-of-the-Month - Author David Alford maintains that “opportunities come everyone’s way,” but few people know what to do when they find one. And in fact, few people actually know how to find the best ones.

That’s why he wrote
3 Apr 17 Posted by: Todd Hatch
in Featured Articles

Business Opportunity Leads is what you seek?  As with any sales position, fresh, qualified leads are the main key to success - the lifeline to sales and profits.

Business Opportunity Leads - Whether you are selling a business opportunity, a service or physical products - like house paint, your...
15 Mar 17 Posted by: Kevin James Culp
in Featured Articles

Sales Success Inspiration - Hello my friends and welcome to another installment of The Special Sauce Series on Sales.

Sales Success Inspiration is the name of the game today.  We left off with the last post "
10 Mar 17 Posted by: Kevin James Culp
in Featured Articles

No Sales! The Leads Suck! After ten years in the industry I have heard this more than once. In fact, I hear this so often that a series of educational blog posts are needed to educate sellers on how to close more deals - period.

No sales! Now, first I preface this entire post with one thought...
 
   

Entrepreneur Exchange is our forum where we interview the Influencers, CEO's, Author's, Business Owners Of All Types, Shapes and Sizes.

Entrepreneur Exchange: Today, we sat down with Marc Winkelman, CEO of
Video Spotlight

Virtual Financial A Home Business in Financial Services You are going to want to see this Video!


Premium Sponsor