BACKGROUND:
I’m interested in transferring my former employer 401k as well as rollover IRA
funds for financing a business. I will be selling Aflac supplemental insurance
products to businesses and their employees. Aflac sales reps work on
commission and are 1099 subcontractors. This will allow me to have a more
steady flow of income than real estate investing alone.
ANSWER: It appears that you do not qualify
for the ROBS 401k (i.e., the use of rollover retirement funds including a 401k
and traditional IRA funds) to finance a business because you are not funding an
operating business.
By way of background, the ROBS arrangement requires that the funds are used for financing an
operating business.
Instead, you appear to be self-employed as a 1099 employee
of Aflac. On the other hand, if you were planning to open an insurance
agency franchise (e.g., All State franchise), then you would most likely
qualify for the ROBS arrangement.
However, because you are a
contractor, you appear to qualify for a solo 401k which can be passively
invested in real estate, but you could not use the funds for your personal use
(i.e., use some or all of the profits generated from the solo 401k owned
property for your personal use). The gains would instead flow back to the solo
401k.
Thanks,
Jim in Houston Texas
ADDITIONAL INFORMATION
No comments:
Post a Comment