Using 401 (k) or IRA to buy a business
With the global and national economies moving out of recession, a strong trend is developing among those working in Corporate America between the ages of 35 and 50 who have built a 401(k) or IRA, deciding that corporate life has been nice, but there is more.
Don’t Let Money Be a Roadblock to Your Dreams!
Using a 401 (k) or IRA to buy a business
Many executives in Corporate America have built a robust skill set. They have an interest in testing their entrepreneurial skills, so this is one of the services Monty Walker and Walker Advisory Services can assist with.
Using a 401(k) and IRA to buy a business or franchise is highly regulated by the U.S. Department of Labor and the IRS. This is because the money in a 401 (k) and IRA receives special tax treatment, as its purpose is to fund the investor’s retirement. Allowing this money to be used before the investor retires requires following and meeting strict compliance requirements. To help entrepreneurs correctly use their funds, Monty and his team handle all plan administration, act as fiduciaries, and meet all the Department of Labor’s and the IRS’s compliance requirements.
During my conversation on air with Monty, I asked the following:
What is the name of the 401 (k) and IRA service you provide?
Answer: It’s called the Entrepreneur Retirement Plan of America.
Can this money in the 401 (k) and IRA be used with other money to buy a business or franchise?
Answer: Yes, this money can be used, along with any other cash, an SBA loan, or another loan source, to buy a business or franchise.
How much does it cost to set up a 401 (k) or IRA to buy a business or franchise?
Answer: The initial cost is approximately $4,500. An additional monthly fee then applies to manage the plan investments. This fee covers all compliance requirements, including the cost of annual Third-Party Procedural reviews, regulatory amendments and updates, and provides unlimited plan-related consulting.
Are most CPAs who handle tax returns familiar with 401 (k) and IRA plans?
Answer: No. As Monty explains, it is normal for him to introduce the Entrepreneur Retirement Plan of America program to a CPA and explain its structure and compliance. Monty welcomes a conversation with the business buyer’s CPA or tax professional so they understand how everything works.
The Entrepreneur Plan of America program meets the needs of a business or franchise buyer who has money in a 401(k) or IRA. For more information, a 12-page PDF is available for download, providing details about the Entrepreneur Retirement Plan of America.
Does this service include a TPA (Third Party Administrator)?
Answer: Yes. Other 401 (k) or IRA plan options are available, but they typically do not include the services of a third-party administrator or TPA. This also includes Record Keeping.
I’ve heard you say you are an Independent Trustee/Fiduciary Platform. What does this mean?
Answer: It is impossible to be independent in the decisions associated with the Plan and Plan Administration. This is especially true when it comes to the prudence of investing in employer stock if the entrepreneur is the Trustee! ERPA professionally manages and administers through an independent Trustee/Fiduciary platform. This means that the entrepreneur receives ongoing professional support and is not left on their own after the C corporation adopts the Plan. This is unique to the Entrepreneur Retirement Plan of America.
How do you manage your Investment Portfolio Selections?
Answer: We offer a comprehensive, turnkey solution that utilizes an existing platform of professionally managed and optimized investment portfolios. The competition does not offer this.
Once again, I heard you talk about custodial services. What does this mean?
Answer: A custodian is a financial institution that holds customers’ securities for safekeeping. The reason for doing this is to reduce the risk of theft or loss. A custodian holds securities and other assets in electronic or physical form. No additional custodial services are required, and the competition does not offer this either.
Is there an audit of the Entrepreneur Retirement Plan of America?
Answer: An independent Certified Public Accountant audits the Entrepreneur Retirement Plan of America annually. The competition does not offer this.
How do you manage your record-keeping?
Answer: All record-keeping is maintained electronically and fully secured, with each person having access to manage his/her account 24 hours a day. Thus, the entrepreneur is not burdened with ongoing record-keeping maintenance.
What Financial Advisory Support do you offer?
Answer: The annual plan maintenance cost includes unlimited compliance support for the entrepreneur’s Tax Preparer, Attorney, and any other key advisors at no cost to the entrepreneur. The competition does not offer this.
What are the significant differences between Walker Business Advisory Services and our competitors?
Answer: Our solution is 100% turnkey and includes a portfolio of professionally managed mutual funds. Our platform’s clients receive ongoing professional trustee, fiduciary, administrative, management, and investment services. Because we serve as the trustee and fiduciary for our solution, plan compliance/responsibility is removed from the client’s shoulders and placed on ours. That’s right. We, not the client, are responsible for plan compliance. It is our legal responsibility.
When using the Entrepreneur Retirement Plan of America (ERPA), an entrepreneur’s responsibility is to make timely deposits of employee contributions and other general items. This includes providing enrollment paperwork to eligible participants. With our service, support, and compliance structure, we offer the most compliant and comprehensive solution available, surpassing that of any other provider.
Listen to my conversation with Monty Walker.
If you prefer, you are welcome to listen to my conversation with Monty on my radio show.
If you have questions or would like more information about selling a business, please call me today at (916) 570-2674 or click this link to have us contact you.
Rogerson Business Services is a business brokerage service based in California.
About Us
Rogerson Business Services is a business brokerage service based in California.
If you are ready to sell your California business, please contact us with any questions you may have. Whether you are selling a medical practice, an HVAC business, a landscaping business, or any other business in California with gross revenue greater than $2 million, contact us today. We are happy to explain our program to sell your business successfully.
We’re happy to discuss the process of selling your business with you. Give us a call or contact us when you are ready.