In other words this probably isn't the way to start a Pinkberry franchise or the corner hardware store. "Small business is extremely risky, and most people shouldn't use retirement funds for risky investments," says Bill Harris, CEO of Personal Capital, an online financial adviser service.

Even Guidant's Ames agrees this isn't for every budding entrepreneur. He tells the story of one client who used her funds to open a dry cleaner, only to sell the business and take a loss a short time later. A loss in this case most likely means she lost a good chunk of her retirement savings.

Bad choices like these, however, are conveniently not Guidant's problem. Says Ames: "Our work is designed to weed out any compliance issues on the tax part. That's what we're good at. We are not small business finance experts. We don't advise on what transactions to invest in or not invest in."

Even sophisticated investors should think twice. I looked into doing this for a real estate business I was interested in, and my tax accountant said, "Are you out of your mind?" He said that the regulators would not like to see this if I am audited. That was enough for me.

Here's my bottom line. Unless you're one of those extremely well-off people we were talking about above (and if you are, you probably have the means and the credit rating to buy a business without dipping into retirement funds) you should not do this, no matter how tempting it may seem. Keep in mind, small businesses fail at extraordinary rates. Only one-third of new businesses stay alive for 10 years, according to the Bureau of Labor Statistics. Only one-quarter of them are still around in 15 years. With odds like that, do you really want to risk your retirement money?

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