Should You Tap Your 401(k) to Start Your Business? Thousands of Americans are using retirement savings to start new businesses. Some thrive, others founder. Is the gamble worth it?

It sounds so easy. In this time of tight credit, you can still finance a new business or franchise by rolling your retirement funds into your new company. You pay no income taxes or early withdrawal penalties, avoid debt and have money available immediately to rent a space, pay a franchise fee, hire employees, buy equipment and pay yourself a salary. And this is all sound, the firms that arrange these rollovers say, because they are "based on long-standing provisions of the Internal Revenue Code."