In the tax world, the term "ROBS" stands for "Rollover for Business Startup." In a ROBS transaction, a person uses existing retirement account money to fund the startup of a new business, and if done right, the transaction is tax-free.
True scenario that happened a couple of years ago: A client asked the following: I have $20,000 in a retirement account with a former employer. My husband wants to start a new business. We were thinking that he could hire me as an employee, and then form a retirement plan under the business. I would transfer [...]