How to Borrow From a Retirement Account
Home Business Magazine Online:
If you are interested in financing your business, you should know about a tax law change that allows you to borrow up to $50,000 tax-free from your 401(k) retirement account. Any business with no employees can establish a self-employed 401(k) plan that comes with a loan feature. It doesn’t matter if your business is a startup or has been around for years. You can run your business part-time or full-time in the form of a sole proprietorship, 1099 contractor, partnership,LLC, or corporation.Once you’ve set up a self-employed 401(k) you can transfer balances from your IRA, 401(k), 403(b), or other qualified retirement funds into your self-employed 401(k). You can then borrow up to 50% of your 401(k) account balance for a maximum loan of $50,000. The loan withdrawal is tax-free and penalty free provided you pay it back with interest to your 401(k) plan.
Photo by *Mike D.
David V. Lorenzo | SoHoSavvy.com on February 20th, 2006 2:09 pm
[...] Thanks to Dane for pointing us to this. [...]
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