ANDERSONVENDING Posted May 24, 2014 Share Posted May 24, 2014 Has anyone financed their vending business with their retirement account? I recently got terminated from my job for violating company policy( they were trying to get me to quit for the last 4 years).I remember something along these lines on here but can't remember.Does anyone know about transferring the money to a self directed account to finance the necessary growth to gain enough additional accounts to provide an income? Thanks, John Link to comment Share on other sites More sharing options...
AZVendor Posted May 24, 2014 Share Posted May 24, 2014 You are allowed to take loans from your 401K under certain circumstances, but the loan has to be paid back to avoid penalties. I would caution you on using these funds for anything not of an emergency nature as these could be your only retirement funds and you don't want to spend them now. Try to find another way to expand your business while leaving your retirement funds alone. You will be glad in 40 years that you did. Link to comment Share on other sites More sharing options...
allen watson Posted May 24, 2014 Share Posted May 24, 2014 Great advise AZ! Use retirement funds for retirement. You might be able to find a vending route that the owner will finance with a down payment. Link to comment Share on other sites More sharing options...
ANDERSONVENDING Posted May 24, 2014 Author Share Posted May 24, 2014 I'm 56 now so I doubt I'll care in 40 years but I see your point. Thanks John Link to comment Share on other sites More sharing options...
CajunCandy Posted May 24, 2014 Share Posted May 24, 2014 I'm with everybody else on this, never borrow from your retirement account! I'm 58 and never did touch mine in the 25 years since it came along. It is very tempting to want to borrow from it to go buy whatever! It just is unfortunate you lost your job for a crazy reason. Mike Link to comment Share on other sites More sharing options...
mission vending Posted May 25, 2014 Share Posted May 25, 2014 You are allowed to take loans from your 401K under certain circumstances, but the loan has to be paid back to avoid penalties. I would caution you on using these funds for anything not of an emergency nature as these could be your only retirement funds and you don't want to spend them now. Try to find another way to expand your business while leaving your retirement funds alone. You will be glad in 40 years that you did. That can only be done with a 401K at your employer (A 401K still at a previous employer will not qualify either) and the loan must be paid back within 60 days of termination of employment before early withdrawal penalties and taxes are applied. So unless you are willing to take the hit, which I don't recommend, this is not a viable option. Link to comment Share on other sites More sharing options...
ANDERSONVENDING Posted May 25, 2014 Author Share Posted May 25, 2014 I'm not willing to fork out early penalty fees so it will just sit for now. And just for the record I wasn't going to borrow against it. John Link to comment Share on other sites More sharing options...
SchligVend Posted May 25, 2014 Share Posted May 25, 2014 It all depends on your company and how they signed up with the 401k plan for their employees.. Where I work if i get fired or I quit I am aloud to pull it all out after the banks 10% penalty.. Link to comment Share on other sites More sharing options...
TKK Posted May 25, 2014 Share Posted May 25, 2014 I guess it depends. My girlfriend just quit her job and had 16k in 401k she took it out because ima get her started in a business. Shes 26. Leaving the money there and not adding to it would be dumb of her. The value of the dollar drops every year. In 10 years that 16k would be worth maybe 10k. Re invest it... make 10k make you 20 etc Link to comment Share on other sites More sharing options...
Golfdogs Posted May 25, 2014 Share Posted May 25, 2014 I guess it depends. My girlfriend just quit her job and had 16k in 401k she took it out because ima get her started in a business. Shes 26. Leaving the money there and not adding to it would be dumb of her. The value of the dollar drops every year. In 10 years that 16k would be worth maybe 10k. Re invest it... make 10k make you 20 etc using the Rule of 72, assuming an 8% rate of return, it will take 8 years to double her money if she leaves it in her 401k...tax free. Link to comment Share on other sites More sharing options...
ANDERSONVENDING Posted May 25, 2014 Author Share Posted May 25, 2014 I'm looking for something to carry me until its time to start collecting social security. I have a retirement with Bridgestone when I was a service manager that don't start until I'm at least 59 1/2 but I will not do anything that I have to pay a penalty on. John Link to comment Share on other sites More sharing options...
TKK Posted May 25, 2014 Share Posted May 25, 2014 With hers it wasnt gaining value unless shed roll it over which she couldnt. It was a savings account. Just dormant. They did penalize her like 20% though but i can make her wag more money with that money...thats why even returning things like cds and all i think are pretty stupid invest it and make alot more. I think the dollar devalues like almost as much as current rates. Unless you have a million in the bank getting a decent return i wouldnt do it. Link to comment Share on other sites More sharing options...
CajunCandy Posted May 25, 2014 Share Posted May 25, 2014 Last quarter my 401-K only did 4.16 % due to the bully's on the block, but it is better than posting a lost. It is almost time to start moving some $ and penny's around because of my age in years. Now to decide between a DN 600E or a Royal 650, time to spend a little of my cash to upgrade the machine shop from the Vendo 480. Link to comment Share on other sites More sharing options...
Lil Maverick Posted June 18, 2014 Share Posted June 18, 2014 AV, You can finance your business through your IRA without pulling the money out of your IRA, which would typically incur a 10% penalty as well as ordinary income tax on the money you withdraw. The first thing you need to do is to find a company that specializes in these type of self directed IRA's. I have invested in real estate through my IRA, but business investment is acceptable also. Here's a link to some information you might find useful. Self Directed IRA's Our self directed IRA is with a company called Quest IRAInc. They should be able to answer any questions you have. Hope this helps. Link to comment Share on other sites More sharing options...
beejaykc aka Munch A Bunch Posted June 18, 2014 Share Posted June 18, 2014 There is another unique way to do it (in some circumstances). You can create an S Corp, issue stock, buy it with your 401k, that money funds your business. No penalties. There are fees to set it all up, but low compared to doing a withdrawl. That's a very high level - there are other rules. Speak to an accountant about this. Forget what it's called. Link to comment Share on other sites More sharing options...
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