This page has been designed to help you as a member
of Northeast Community Credit Union become a more savvy financial
consumer, as well as teach you how to protect yourself from Identity
Theft. We hope this site is beneficial to you and a resource for
A checking account is an
important money management tool. Whether you are
to open a checking account for the first
time or you have had difficulty handling an
account in the past, CheckRight is designed to teach
you how to manage your checking account. Among other
things, the program will help you learn how to:
Open an account
CheckRight is a self-study program that allows you
to learn at your own pace. Once you have read
through the chapters, you will find a quiz that will
test your knowledge on
checking accounts. If you
have been referred to this program by a third party,
you will have the option to send your results
directly to them.
©2008 GreenPath, Inc. All Rights Reserved
ROBS what does it mean for Retirees?
Want to quit the rat race and start your own
business? Or maybe you've lost your job and are
eyeing franchise opportunities?
If funds are limited and credit is tight, you might
consider using what's left in your 401(k) to start a
business or a buy a franchise.
Yes, it is possible. And proponents tout a method
known as "a rollover as business startup" -- or ROBS
-- as a tax-friendly way for budding entrepreneurs
to tap their 401(k) accounts.
"This is clearly a permissible type of investment,
permitted by the IRS code," says Leonard Fischer,
founder and CEO of BeneTrends, a financial services
company specializing in ROBS located in North Wales,
But not everyone is sold on ROBS. In fact, some
people maintain a ROBS is fraught with dangerous tax
"(A ROBS) strategy sounds amazing ... it all sounds
too good to be true because it is," says Jeff
Nabers, CEO of Nabers Group and founder of the IRA
Association of America, a trade organization.
Starting up a business using this strategy
immediately raises suspicions with the IRS, Nabers
"Anyone who (does a ROBS transaction) puts a target
right on their back: 'Audit me,'" Nabers says.
ROBS plans are touted by franchise sellers all over
the Internet and arranged by investment firms
specializing in this practice.
ROBS firms charge a fee to walk clients through the
process of creating a C corporation. The new
corporation starts its own 401(k) plan, which must
offer employees the option to purchase stock in the
company. The new business owner then rolls over
funds from an existing 401(k) into the newly created
Because the assets are moved from one tax-exempt
vehicle to another, business owners avoid taxes and
The sole participant in the plan (e.g., the owner of
the new company) can then direct the investment of
the 401(k) account balance into a purchase of
employer stock in the new corporation. The
transferred funds are used to either purchase a
franchise or fund the new business -- essentially
creating tax-free working capital.
Guidant Financial Group of Bellevue, Wash., has
helped clients tap a total of $1.5 billion in 401(k)
funds since the firm opened its doors in 2003. A
large percentage of these clients use their funds
for entrepreneurial ventures.
David Nilssen, CEO of Guidant Financial, says a
major benefit of the ROBS approach is that clients
start out a business relatively debt-free,
increasing the chances of being profitable sooner.
"Profits made can be funneled into growing the
business rather than paying off debt," he says.
Too good to be true?
However, others -- like Nabers -- warn about the
dangers associated with ROBS.
Martin Hauptman, an attorney specializing in
Employee Retirement Income Security Act, or ERISA,
law, says the ROBS approach may sound simple.
However, it is actually a complicated process
fraught with the potential to lose your whole
retirement savings -- and then some -- to the IRS.
A ROBS may be legal, but it operates in a grey area
of IRS codes and regulations, says Hauptman,
principal with the law offices of Hauptman &
Richmond, PA of West Orange, N.J.
To keep a ROBS transaction legal, the business owner
must heed a slew of IRS regulations and avoid making
certain prohibited transactions, Hauptman says.
The penalties for not complying with the rules are
For example, if the IRS determines the deal is a
prohibited transaction, it can trigger excise taxes.
"If you run afoul of these prohibited transactions,
you can run up 110 percent -- or more -- in
penalties," says Hauptman.
Hauptman has helped guide clients through using the
ROBS method. He says he is careful to construct
plans that work within IRS regulations.
ROBS deals must be done very carefully and no two
cases are exactly the same, says Hauptman, who
recommends first contacting an attorney who is
well-versed in ERISA law before venturing into any
"I wouldn't recommend this as a do-it-yourself
project, and it's not for the faint of heart,"
Read more: http://www.bankrate.com/finance/money-guides/small-business-robs-risks-retirement-1.aspx#ixzz3JjgAxlpD
Follow us: @Bankrate
on Twitter | Bankrate
Every time you click on an external
link, you may be leaving the NCCU web site and
linking to an alternate web site that is not
operated by NCCU.*