I am considering opening own consulting business. Should I consider pulling money from my 401 plan for start up cost? I am 44yr and have about 40,000 in my 401

Thanks in advance!

Have you did a business plan, have you looked into the business,

I have always hated to see people spend their entire retirement savings and then lose their entire savings and retirement.

Quote:

---

Originally Posted by Mutterly

I am considering opening own consulting business. Should I consider pulling money from my 401 plan for start up cost? I am 44yr and have about 40,000 in my 401

---

No, No and NO!

First, there is the tax 10% penalty you will take on the distribution. Then there is the tax liability.

What startup costs would there be for a consulting business? Mostly business cards, a brochure some advertising. If you are not prepared for those costs already, you should be holding off. Raiding part of your nest egg is definitely not the way to go.

Quote:

---

Originally Posted by Fr_Chuck

Have you did a business plan, have you looked into the business,

I have always hated to see people spend thier entire retirement savings and then lose their entire savings and retirement.

---

Yes I have completed a business plan and have identified first clients. My concern is I will have to discontinue my 8-5 employment due to conflict of interest / company guidelines and I was thinking about my 401 monies in case of the worse scenario to cover living expenses until my business is strong and income is coming in.

I agree with what Scott said. Definitely not. Leave the retirement saving alone. Borrow if necessary.