Business Start Up Homepage

Question: Is there a way to finance a business start up using money from my 401k plan?

(Posted by: islander on 2010-02-28 08:21:40)

I am thinking of starting a business with my 401k plan money. I am not ot the age that I can take money out without a penalty. If I make my wife as a custodian to some of the money and start anew business. Is it legal for her to be the custodian and me being the 401k investor? The busines will be started by my wife not me. I will only be the recipient of my 401k investment and my wife would act as the custodian and advisor of my 401k plan.

Posted by: Plea_of_insanity on 2010-02-28, 16:06:15

Technically, yes, the assets in a 401(k) plan can be invested in just about anything. You could invest in Beanie Babies, gold bouillon, or magic beans. Effectively, you would use your 401(k) assets to buy shares of stock in her company. Very few 401(k) plans allow participants to invest their assets in anything though. Check with your 401(k) plan administrator to be sure.

Posted by: Age of Reason on 2010-02-28, 08:23:54

No. Only hardship loans are permitted. Starting a business is not a hardship. Look for private investors