Should you use retirement funds?

Anyone thinking of taking retirement cash to start a business needs to do some homework, said Coralie Myers.

Myers, formerly loan officer and manager of the business information center with the Small Business Administration’s Spokane office, now runs SBA Business Solutions. She advises people on small business financing (www.sbabusiness solutions.com).

Here’s her checklist:

•Do you have another source of funds for your retirement if the business does not succeed? The nearer you are to retirement, the more important this is.

•Evaluate your business plan and likelihood to succeed as an investment, not as a means to an end.

•If you use a plan that invests 401(k) funds in your company, don’t make large distributions to yourself as the owner. This runs counter to IRS rules and you will likely be audited.

•If you go the route of reinvesting your 401(k) funds in your own business, use a company with lots of experience in this area. These plans are extremely complicated and professional guidance is critical.

•Have your attorney and accountant review any plan to ensure it complies with IRS rules and regulations and meets your needs.