I’ll bet you didn’t know you could use an IRA (called a “self-directed” IRA) to fund your business. I recently wrote about using IRA’s to fund businesses on my About.com Guide Site, U.S. Business Law & Taxes.
But I hesitated a long time before I wrote it. I don’t give investment advice, and I truly think this is not a smart way to invest an IRA. I have the ability to only think of two instances in which it MIGHT (note my emphasis) be ok:
1. You have lots of other money invested for retirement, and you have a defined benefit pension and health care from a large employer.
2. You are a very young baby boomer (late 40s) and you’ve lots of time to build you retirement funds back up if you lose the money you’ve invested in the business.
What do you think? Would you take into account investing your IRA into your business?
Tags: baby boomers, investments, retirement, self-directed IRAs, small business
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