ROBS buy back/ buyout experience?

October 01, 2025

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Nova Iorque, NY, Estados Unidos

Hi All, I've seen some posts here about ROBS providers, usage of ROBS, etc. But I haven't seen discussions around ROBS buyout, i.e., people who have done it and the specific mechanics behind it. I'm particularly curious about the valuation aspect of it to be compliant with the IRS. Meaning, am I going to eventually pay my 401k plan back with a 2, 3, 4x premium on the original investment? Of course assuming the business will grow over time. If you are not comfortable posting it for everyone, feel free to DM me. Thanks!

Reply by a searcher
from Rutgers in Philadelphia, PA, USA

Check out the acquiring minds podcast episode with Doug Johns. He paid back his 401k and goes into detail about the process.

Reply by a searcher
from North Carolina State University in Sykesville, MD 21784, USA

I am no attorney, but when I looked into this myself and came to the conclusion that it was expensive and difficult. Kept getting pointed to find and ERISA attorney to help. My understanding is that you would have to pay yourself enough to then buyout the 401K ownership and as others have stated at the new evaluation. So if your business is doing well enough to pay you what you need in salary and enough to buy out the 401K, it is probably going to be valued higher than when you bought. This means you are going to be paying income tax on the money you need to buy back the 401K. For myself, I have an 84% 401K ownership and 16% self ownership. I wish I would have only used my 401K money and kept my cash available, as I don't plan to sell before reaching retirement.

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