ROBS 401k for Invesment Business: NO

BACKGROUND

I am self-employed as a licensed psychologist (S corp) and have a solo 401k retirement plan, held at TD Ameritrade, of approximately $100k in cash/equities. I am also a licensed real estate broker and have 15 years of experience investing in real estate. In addition, I have 10 years of experience investing in stocks, options, and futures. I spend at least 30 hours per week actively investing, and would like to develop this into a full-time business and retire from my clinical career.

I would like to set up a ROBS 401k/PSP account that will develop the appropriate corporate structure and ongoing administration as a Qualified Retirement Plan. I would like to use this plan to start a new business with a primary purpose of investing across assets. I am primarily interested in this business being a proprietary trading firm (stocks, options, futures) but would also like the ability to invest in real estate such as foreclosures, rental properties.

RESPONSE

One can't use the ROBS 401k/PSP to create an investment business - instead the ROBS is designed for active operating companies (e.g. which provides goods and/or services). Based on your self-employment activity as a real estate broker (and assuming you don't have any full-time w-2 employees) you could establish a Solo 401k which could be used to invest in both the traditional and alternative investments that you describe above. Of course, the returns on those investments will flow back to your Solo 401k (i.e. it would not be permissible for such funds to flow to your personal account).

To learn more about the solo 401k plan, VISIT HERE. 

To learn more about the ROBS 401k/PSP, CLICK HERE.