The ideas and reasons behind it
When it comes to a retirement plan, Americans generally are keen to start with it. It has been seen that Americans have about $16.5 trillion fed into various kinds of retirement plans according to the reports by the Investment Company Institute. If the purchase of Treasury debt by foreign buyers is slowed, the money that is set aside for retirement fund becomes very attractive for politicians. The debt situation in the country is such that it is best that you move your pension plan offshore. If the inflow of foreign capital into the U.S. Treasury slows down or stops, the interest rates will balloon very fast in the country which would mean the interest payments on outstanding national debt would be more. This implies that politician at home would have less cash to spend. This would create a ripple effect making the politicians latch onto any available funds amongst which pension funds are quite accessible.
The government can make rules mandating that the retirement plans in the U.S. be converted to some or all of the existing holdings to U.S. Treasury paper. Although there is no guarantee that such an incident might happen, it is not unlikely given what Washington has been doing in recent times across the many facets of the economy. Preparing for the future would mean being ready for unexpected events. Given the fiscal challenges that America is facing, and the depreciating value of the dollar, moving your pension plan offshore seems like a lot smarter idea. If you are signing up with a foreign company to move your pension money offshore, you should make sure that it is registered with the Securities and Exchange Commission in order to have permit to work with American clients.
There are some foreign companies which tie of with any state based IRA firm and in that case you will have a U.S. custodian and your money would probably be within the reach of the retirement rules of the U.S. the reason your money offshore would be safe because if the lawmakers at all make a move to nationalize pensions, they would probably leave out the small amounts of offshore money. By moving your IRA offshore not only would you address the concern of pension nationalizations, you would also receive diversification in terms of getting your assets managed. Here are some outlines steps for moving your IRA offshore.
- An IRA account is established which is self directed.
- You will direct the IRA to form an offshore company (LLC or corporation).
- The offshore company will open an offshore brokerage account. You will have sole signatory control over the account.
- You will then move funds from your retirement account which is on hand in the U.S. to the offshore brokerage account.
- You will be able to buy and sell whatever investment that you wish through the brokerage account. Along with this you will have the tax benefits of an IRA or 401(k) account.
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