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What is a BORSATM (Business Owner’s Retirement Savings Account) Plan?

Simply put, the BORSATM plan is a tool that allows you to fund the purchase of a franchise, business start-up, or business property anywhere in America using your holdings in:

• 401(a) pension
• Profit sharing 401(k)
• 403(b), 457, IRA rollover

Through the utilization of a BORSATM plan, these purchases can be accomplished without distributions, taxes, penalties, or the use of loans.

The BORSATM plan has helped many entrepreneurs and franchise buyers save money on their start-up businesses all over the country.

How the BORSATM Plan Works

To understand how you can access these funds without penalties, taxes, or interest you must understand two bodies of law. The two bodies of law that govern this structure are:

• Employee Retirement Income Security Act of 1974 (ERISA)
• Internal Revenue Code of 1986 (IRC)

For purposes of the structure ERISA governs who is eligible and what you can or cannot do in a qualified retirement plan and the IRC addresses what is deductible going into the plan and how money is taxed when it is taken out of the plan.

Distributions from qualified retirement plans are generally taxed as ordinary income for both federal and state purposes. Additionally, distributions from a qualified plan prior to age 59 ½ are subject to a penalty of an additional 10%.

The combination of state and federal tax and penalties can require more than 50% of your retirement savings be sent to tax authorities rather than fund your retirement years.

How the BORSATM Plan Can Help You and Your Start-Up Business

Many baby boomers look at the money in their qualified plans and want to use these funds as equity to start or buy the business they will use to fund their second careers or retirement. Frustrated by a web of complex rules and regulations, they often postpone the beginning of this second phase of their adult life or simply resign themselves that they will be sending 50%+ of their life savings to tax authorities in order to pursue their dream.

Neither of these options is necessary. DRDA can show you how you can access the savings in your qualified plan without taxes, penalties, or interest with the BORSATM plan.

How the BORSATM Business Financing Structure Works

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