Across the United States, a quiet financial revolution is underway.

Professionals are leaving traditional corporate and government careers at a growing rate, and rather than looking for their next job, many are choosing to build something of their own. This shift is showing up across industries, across demographics, and across every stage of career.

At IRA Financial, we are seeing it firsthand. Over the past several years, a growing number of entrepreneurs have been establishing Solo 401(k) plans as they launch new businesses. At the same time, former government employees, many with significant retirement assets in public-sector plans, are increasingly using ROBS (Rollover as Business Start-Ups) strategies to access retirement capital to finance their ventures without triggering taxes or penalties.

These two strategies are becoming some of the most powerful tools available to entrepreneurs who want financial independence without starting from zero. I have spent 25 years helping people use them, and I am convinced that most entrepreneurs are not taking full advantage of what is available to them.

A New Generation of Entrepreneurs

One of the most notable trends within this broader shift is the rapid growth of businesses launched by Black entrepreneurs, particularly Black women. According to a recent Wall Street Journal article, Black women are now launching businesses at one of the fastest rates in the United States, owning nearly three million businesses and representing roughly 18% of all women-owned businesses in the country.

This growth reflects both opportunity and necessity. Many professionals have faced barriers to advancement within traditional corporate environments, including slower promotion rates and reduced access to executive leadership. Rather than waiting for opportunity, they are creating it.

The same pattern is emerging among former government employees. Black Americans have historically been strongly represented in public-sector roles, and with federal workforce reductions accelerating in recent years, many experienced professionals are finding themselves at a crossroads. For those with years of savings in plans like the Thrift Savings Plan (TSP), 403(b), or 457(b), entrepreneurship is increasingly the next move.

Technology has made this transition more accessible than ever. Digital tools, remote work infrastructure, and online marketplaces have dramatically lowered the barriers to starting a company. But launching a business does not eliminate the need to plan for retirement. If anything, it makes it more urgent. One of the biggest mistakes I see new entrepreneurs make is assuming they will figure out retirement planning later, after the business is established. Later has a way of never arriving.

The First Thing to Get Right

Before you think about growing retirement wealth as an entrepreneur, you need to protect what you have already built.

This is where a lot of people make costly and entirely avoidable mistakes.

When you leave an employer, whether that is a corporate job, a federal agency, or a nonprofit, your retirement assets do not automatically follow you. They sit in your former employer’s plan until you decide what to do with them. And that decision matters more than most people realize.

The most common mistake I see is cashing out. It feels like access to capital at exactly the moment you need it, but the cost is significant. A traditional 401(k) or TSP withdrawal before age 59 and a half triggers ordinary income tax on the full amount plus a 10% early withdrawal penalty. On a $200,000 account, that can mean losing $60,000 or more to taxes and penalties before you ever put a dollar to work in your business.

The second mistake is inaction. Leaving your money sitting in a former employer’s plan indefinitely is not a neutral decision. You lose control over how it is invested, you may face limited options, and you miss the opportunity to put those funds into a structure that actually serves your new life as an entrepreneur.

The right move in almost every case is to roll those funds over, either into an IRA or directly into a new retirement plan structured for your business. A direct rollover triggers no taxes and no penalties, and it keeps your retirement assets working for you on your terms.

For former government employees with assets in a TSP, 403(b), or 457(b), this rollover is often the starting point for everything that follows, including the ROBS strategy covered later in this post.

The bottom line is this: the transition from employee to entrepreneur is not just a career decision. It is a financial inflection point. Getting the retirement piece right from the start protects the wealth you have already built and sets the foundation for everything you are about to create.

The Solo 401(k): Built for the Self-Employed

When individuals leave traditional employment to start a business, they also leave behind employer-sponsored retirement plans. Many assume this means sacrificing retirement savings opportunities. In reality, the opposite is often true, and this is one of the things I most enjoy telling new clients.

A Solo 401(k), also known as an Individual 401(k), is designed specifically for self-employed individuals and business owners with no full-time employees other than themselves or a spouse. It allows entrepreneurs to act as both employee and employer, which dramatically increases contribution capacity compared to other self-employed retirement options.

For 2026, the contribution limits are among the most generous available under U.S. retirement law. Entrepreneurs can contribute up to $24,500 as an employee deferral, plus a profit-sharing contribution of up to 25% of compensation. Combined, the total maximum contribution reaches $72,000, or $80,000 for those over 50, and $83,250 for those between ages 60 and 63.

To put that in perspective, an entrepreneur contributing $50,000 annually to a Solo 401(k) at an average 8% annual return could accumulate over $2.2 million in twenty years, entirely within a tax-advantaged environment. That is not a hypothetical. That is the math working exactly as intended when you use the right account.

Why the Solo 401(k) Outperforms the SEP IRA

This is where I want to be direct, because I see this mistake constantly.
Many self-employed individuals default to a SEP IRA because it is simple to set up.

And it is simple.

But that simplicity comes at a real cost, and over the course of a career, that cost can be enormous.

A SEP IRA does not allow employee salary deferrals, does not offer catch-up contributions for those over 50, and has no participant loan feature. The Solo 401(k) includes all of these, along with access to the Mega Backdoor Roth strategy, which allows entrepreneurs to contribute up to the full $72,000 annual limit into Roth savings, creating tax-free growth at a scale most retirement accounts cannot match.

I have worked with countless entrepreneurs who spent years in a SEP IRA before switching to a Solo 401(k) and realizing how much they had left on the table. The SEP IRA is not a bad product. It is just significantly less powerful, and for someone serious about building wealth through their business, the Solo 401(k) is the right tool in nearly every scenario.

Investment Flexibility Through a Self-Directed Structure

A self-directed Solo 401(k) takes this further by giving business owners what is known as checkbook control, the ability to make investment decisions directly without requiring custodian approval for each transaction.

This opens the door to a wide range of assets beyond traditional stocks and bonds, including real estate, private equity, cryptocurrency, precious metals, private lending, and startup investments. For entrepreneurs already operating in private markets, this flexibility allows them to put their investment knowledge to work inside a tax-advantaged structure.

In my experience, this is where sophisticated entrepreneurs really start to see the difference. They are already evaluating deals, understanding private markets, and identifying opportunities that traditional investors never see. The self-directed Solo 401(k) lets them act on that knowledge with tax-advantaged dollars rather than after-tax capital.

The participant loan feature adds another layer of flexibility. Solo 401(k) holders can borrow up to $50,000 or 50% of the account balance, whichever is less, for any purpose, including funding business needs. The loan must be repaid within five years at an interest rate tied to the prime rate, currently 6.75% as of March 2026, with no taxes or penalties triggered.

ROBS: Turning Retirement Savings Into Startup Capital

For entrepreneurs who have built significant retirement savings in a former employer’s plan, the ROBS strategy offers a different but equally powerful option. And in my opinion, it is one of the most underused strategies in entrepreneurial finance.

A ROBS, or Rollover as Business Start-Up, allows a prospective business owner to use eligible retirement funds to finance a new business without taking a taxable distribution. The structure is based on an exception to the IRS prohibited transaction rules under Internal Revenue Code Section 4975(d)(13) and works as follows.

The entrepreneur establishes a C corporation to operate the business. That corporation adopts a qualified 401(k) plan. The entrepreneur then rolls over eligible retirement funds from a former employer plan, such as a TSP, 401(k), or 403(b), into the new company’s retirement plan. The plan uses those funds to purchase stock in the C corporation, and the proceeds become operating capital for the business.

Because the transaction is structured as a retirement plan rollover and investment rather than a personal withdrawal, the entrepreneur accesses capital without paying income tax or early withdrawal penalties.

The benefits go beyond the tax treatment. Unlike a traditional bank loan, there are no monthly loan payments. Entrepreneurs can launch with a stronger balance sheet and greater operational flexibility. And rather than giving up equity to outside investors, founders are investing in themselves.

I have seen this strategy work exceptionally well for former government employees in particular. Many have spent 20 or 30 years building retirement savings in a TSP or 403(b), and when they decide to make the leap into entrepreneurship, those funds represent their most significant financial asset. The ROBS structure allows them to put that capital to work in their own business without the tax hit that would otherwise make a withdrawal financially devastating. Done correctly, it is one of the most elegant tools in the entrepreneurial finance toolbox.

The Retirement Planning Imperative for Entrepreneurs

Entrepreneurship creates financial freedom, but it also removes the safety net of employer-sponsored benefits. Without a deliberate retirement strategy, business owners risk building a company while falling behind on long-term financial security.

Here is what I tell every entrepreneur who comes to us: the Solo 401(k) and ROBS structure are not just retirement tools. Used correctly, they become part of the business strategy itself, providing tax efficiency, investment flexibility, and access to capital at the moment it matters most.

If you are leaving a corporate or government job to start a business, do not wait until the business is profitable to think about this. The decisions you make in the first year, about which retirement plan to establish, how to structure your contributions, and whether a ROBS makes sense for your situation, will have a compounding effect on your financial future for decades.

IRA Financial works with entrepreneurs at every stage of this process, from establishing the right plan structure to handling ongoing compliance and reporting. If you are starting a business or recently left a corporate or government role, we are happy to walk you through your options and help you build a structure that works for both your business and your long-term wealth.