ROBS (Rollovers as Business Startups) is a structure that lets you invest retirement savings into a business you'll own and operate without taxes or the 10% early-withdrawal penalty. Your 401(k) or IRA rolls into a new C-corporation's retirement plan, which then buys stock in that C-corp, funding the purchase.
How ROBS supplies the injection
- You have $80,000 in an old 401(k)
- ROBS rolls it into a new C-corp's plan, penalty-free
- The plan buys $80,000 of C-corp stock, cash the business can use as its SBA equity injection
ROBS-sourced cash can serve as your down payment, but it must be set up precisely, plan documents, valuations, and ongoing compliance, or it triggers taxes and penalties.
Why it matters when buying a business
ROBS can solve the hardest part of a first acquisition, the cash injection, without draining after-tax savings. But it puts retirement money at business risk, requires a C-corp, and demands strict IRS/DOL compliance. Treat it as a specialist structure and get professional setup before relying on it.
