Direct Answer: This Is a Decision-Support Worksheet, Not a Prediction
A ROBS transaction can move eligible retirement assets into a qualified plan that buys employer stock in a C corporation. The plan then owns stock whose value depends on the private business, so the retirement account is exposed to business performance even when the transaction is documented correctly.[3]
This calculator keeps the model bounded. It calculates concentration, loss-scenario arithmetic, optional foregone growth, and optional replacement contributions from user-entered numbers. It does not assign a risk score, grade, probability of failure, suitability finding, personalized advice, or regulatory pass/fail label.
Risk Concepts the Calculator Keeps Separate
Sequence risk also matters. A business loss shortly before retirement can leave less time to rebuild liquid, diversified assets before withdrawals are needed. That timing concern is separate from household emergency savings, business debts, personal guarantees, and fact-specific plan-asset protections.
Formulas and Timing Convention
- Concentration percentage: retirement amount committed ÷ total retirement assets before transaction × 100.
- Business value lost: retirement amount committed × user-entered business loss percentage.
- Retirement assets remaining: total retirement assets before transaction − scenario business value lost.
- Starting assets lost: scenario business value lost ÷ total retirement assets before transaction × 100.
- Foregone growth: committed amount × ((1 + annual rate)horizon − 1), only when selected.
- Recovery contribution: annual end-of-year contribution needed to equal the largest modeled loss. At zero return, contribution = loss ÷ years. At a positive return, contribution = loss ÷ (((1 + rate)years − 1) ÷ rate).
Assumptions, Exclusions, and Boundaries
The worksheet uses dollars, whole-year horizons, annual rates, and end-of-year replacement contributions. Defaults are neutral zeroes or clearly disclosed examples. Inputs have numeric bounds and cross-field validation so the committed amount cannot exceed starting retirement assets.
Excluded items include tax brackets, penalties, plan-correction costs, valuation invoices not entered, actual market returns, business sale proceeds, bankruptcy outcomes, personal guarantees, payroll obligations, and whether a contribution can legally or practically be made in a specific account. DOL fiduciary duties and IRS ROBS compliance concerns remain separate professional-review issues.[1][2][3]
Example Use Cases
- Zero concentration: entering no committed retirement assets leaves the business-loss scenarios at zero; that does not evaluate business debt, household risk, or non-retirement cash.
- Total concentration: committing all retirement assets shows that a 100% business loss removes all starting retirement assets in the worksheet.
- No-growth case: leave growth unchecked or enter 0% to avoid unsupported market-return assumptions.
- Recovery case: use the replacement-contribution section only when you want the disclosed annuity calculation; it is not a promise that the plan or IRA will accept that contribution.
Frequently Asked Questions
Does this calculator predict whether my business will fail?
No. It applies user-entered business-loss percentages to retirement assets committed through a ROBS-funded company. It does not estimate probability, business quality, valuation, investment suitability, or a universal risk rating.
Are the concentration flags regulatory thresholds?
No. The 25% and 50% concentration signals are worksheet thresholds selected to prompt review. They are not regulatory thresholds, IRS, DOL, SEC, or FINRA safe harbors, or violations.
Does a ROBS protect my retirement assets from every business creditor?
No. Retirement-plan assets may have protections, but exceptions, bankruptcy facts, prohibited transactions, guarantees, payroll, taxes, and corporate obligations are fact-specific. This worksheet separates retirement-account exposure from household and business liabilities.
Why include foregone growth and recovery contributions?
Those lines are optional because they depend entirely on user-entered assumptions. The formulas are disclosed, including the zero-return recovery path, and the result is not a promise that contributions can or will be made.
Sources and Verification
Sources were checked Aug. 12, 2026. They support general risk, fiduciary, ROBS, diversification, and private-market concepts only. They do not approve any transaction, provider, valuation, rollover, tax filing, or investment choice.
- DOL fiduciary responsibilities
DOL summary of ERISA fiduciary duties, including prudence, diversification, following plan documents, and acting solely in participants' interests. Checked Aug. 12, 2026.
- DOL Meeting Your Fiduciary Responsibilities
DOL publication explaining plan fiduciary duties, investment monitoring, participant information, and employer-securities considerations for eligible individual account plans. Checked Aug. 12, 2026.
- IRS ROBS compliance project
IRS ROBS source describing qualified-plan employer-stock purchases and IRS concerns about valuation, Form 5500/Form 1120, employee participation, promoter fees, and business failure. Page last reviewed Nov. 16, 2025; checked Aug. 12, 2026.
- SEC asset allocation and diversification
SEC investor education explaining diversification and asset allocation as risk-management concepts. Checked Aug. 12, 2026.
- FINRA concentration risk
FINRA investor education warning that concentrated positions can amplify losses, including retirement-plan employer-stock examples. Checked Aug. 12, 2026.
- SEC private placements investor bulletin
SEC Investor.gov bulletin explaining restricted securities, limited resale, lack of active market, and private-placement risks. Checked Aug. 12, 2026.