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Using retirement money to start a business has pros and cons

Be wary of using your retirement money to start a business -- it's a lot more complicated than most people realize.

By Marlene Y. Satter | Updated on May 02, 2017
If you choose the Rollover for Business Startups, or ROBS, option to start your business, you’ll have to operate as a C corporation, whether you want to or not. (Photo: Getty)

Looking forward to retirement as a time to start that business you’ve always known you could run? Be wary of using your retirement money as seed money, lest its pros turn into cons.

According to a NerdWallet report, while there’s a retirement account option for launching a business—known as a Rollover for Business Startups, or ROBS—there are reasons to be very careful if you take this route to entrepreneurdom. Says the report, “While this type of financing can provide you with money to fund your business, the complex transaction doesn’t make sense for everyone.”

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