Low-cost assistance rolling over your retirement funds to start a small business.

  • Best for low-cost help using your 401(k) to fund a small company.
  • Pick something else if you expect to have more than 10 employees by next year — it can get expensive.

Details

Product Name My Solo 401k Financial
Setup Fee $4,000
Annual Fee $899+
Requirements Operating business, C corporation (or willing to convert to a C corporation), non-Roth retirement account, employee of your business

Application Criteria

  • Eligible retirement plan.
  • Operating business.
  • Registered as a C corporation.
  • Work at your business.

First, do I qualify?

You must eventually meet the following requirements to qualify for a Rollover for Business Startups (ROBS) — though you don’t need to meet them all when you reach out to My Solo 401k Financial:

  • Eligible retirement plan. You must have an IRA or a former employer 401(k), 403(b), Keogh, SEP, SIMPLE or other non-Roth plan eligible for ROBS.
  • Operating business. Your business must be active and running when you apply for a ROBS through My Solo 401k.
  • Registered as a C corporation. If you aren’t already registered as a C corporation, you’ll have to change your business structure to this one — it’s the only that qualifies for a ROBS.
  • Work at your business. You must be registered as an employee of your business to qualify for this funding.

Other requirements and restrictions

  • Valuation. Your up-and-running businesses must be valued before you can get a ROBS.
  • No commission. You can’t charge commission on the stock you purchase when you roll over your retirement plan.
  • Employee rollovers. If your company already has employees, you might be required to allow them to roll over their retirement plan into the business as well.

What makes My Solo 401k unique?

My Solo 401k is one of a handful of companies that specializes in helping entrepreneurs fund a new business with your 401(k). Its pricing is lower than what many other companies out there charge.

How much does a My Solo 401k ROBS cost?

My Solo 401k is on the cheaper side compared to other ROBS providers out there. Here’s how its two fees break down:

Setup fee: $4,000

This one-time setup fee covers all costs associated with setting up your ROBS including:

  • Forming a C corporation
  • Establishing a 401(k) profit-sharing plan (PSP) to fund the new business
  • Setting up an EIN for the 401(k) PSP
  • Setting up an EIN for the corporation
  • Opening a corporate bank account
  • Opening a brokerage account for the 401(k) PSP at Fidelity Investments
  • Preparing transfer forms for transferring your retirement funds to the 401(k) PSP
  • Assistance responding to any IRS or Department of Labor audits

Annual fee: Starting at $899

My Solo 401k charges $899 for the first 10 employees — also referred to as participants — in a ROBS and $75 for each additional employee. This covers the cost of annual support for your ROBS, including:

  • Preparing IRS Tax Form 550 and valuation
  • Reporting for Form 1099-R
  • Making annual amendments required by the IRS
  • Adding employees who become eligible for the 401(k) PSP
  • Reviewing annual employee statements
  • Computing plan contributions
  • Carrying out nondiscrimination testing
  • Other annual additions and coverage

Pros

  • Low cost compared to other ROBS
  • Accepts all ROBS-eligible retirement plans
  • Legal and compliance support in case of an audit
  • Works with SBA lenders and can assist with the application
  • Veteran discount program

Cons

  • Potentially high annual cost for fast-growing companies
  • Must establish a C corporation
  • Not as fast as some business loans

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