Before You Use Retirement Funds for Your Startup
I’ve been unemployed for four months and have six weeks of emergency savings left. I have a commercial trucking license, but no one will hire me since I haven’t driven a tractor-trailer for eight years. (I was workingas a field service technician during that time.) I’d like to start an independent trucking business and have $50,000 in IRAs. Should I cash in my IRAs or get an ERSOP? —K.H., Wrightstown, N.J.
Cashing out your retirement savings, or investing it in a startup venture (which is what an ERSOP—”Entrepreneur Rollover Stock Ownership Plan”—does), is inherently risky and ill-advised. If things don’t work out with the trucking business, not only will you have no income, but you’ll also have no life savings. While desperate people sometimes—understandably —feel they must take desperate measures, make sure you’ve first exhausted all other options. Read more:
