Check out this interesting article by analyst Christian Reeves posted on escapeartist.com on May 2015.
The US dollar is flying high… at least relative to the other underperformers out there. Add to that a record stock market, and things are great!
Well, I’ve been through to many bubbles in the last 20 years to buy the hype. I believe now is the time to take cover, not follow the herd over the cliff.
But, opinions are like bloggers… everyone has one in them somewhere.
If you believe this will go on forever, with America imposing her economic will on the rest of the world, then keep your cash in dollars and in US banks.
If you think the emperor has no clothes, move everything offshore and into hard assets… don’t forget a bunker for your gold.
If you’re somewhere in the middle, think about planting a few flags offshore for diversification and as a possible exit strategy. I suggest you start with your vested IRA account. It’s one of the easiest assets to protect, and one of the most tempting for a cash strapped government.
- The US government has already fired the first shot in the “centralization” of all IRA accounts and their conversion in to US Treasuries. Checkout my post in our asset protection portal: The MyRa Scam.
Note that this is not about doom and gloom… it’s about protecting against potential risk. We each assign a different value or probability to that risk, and that determines how much we each should move abroad.
Don’t get me wrong. I’m not an alarmist… nor do I bang the gong of fear every chance I get. There are way too many internet fear mongers out there already. But I do take notice when an ever increasing number of experts are calling for a significant revaluation of the dollar in the coming year.
For example, take a listen to my recent interview with Jim Rickards. Jim is the best selling author of Currency Wars and The Death of Money… two must reads. He’s also the advisor to the CIA and Pentagon on asymmetric (financial) warfare. So, when he tells us our dollar is on a razor’s edge, we should pay attention.
You might not believe the danger is clear and present, or eve imminent, but I think we can all agree that some level of risk exists. What will you do to protect your savings and your family?
As I said above, one of the easiest and most important steps you can take is to get your IRA out of harms way. Move it offshore, out of the dollar, and in to secure high returning assets.
And, at least for the time being, there is a simple and legal way to protect your retirement account while maintaining it’s tax preferred status. That is to say, you can move your IRA offshore without taking a distribution or incurring any tax or penalty.
How to Take Your IRA Offshore
In order to move your IRA offshore, you must first wrestle control away from your commissioned broker. This is done in four steps:
- Move your vested accounts to a custodian that allows for international transactions. I can recommend a number of firms who specialize in this area. Note that these accounts must be vested… from a previous employer. Your current employer likely has rules preventing you from moving the IRA from their custodian.
- Incorporate an offshore IRA LLC. This is a specially designed entity, typically from Belize or Nevis, that is compatible with US IRA rules. The LLC is owned by the IRA and a specially drafted operating agreement is required. Belize and Nevis are recommended because they have LLC statutes. Most other jurisdictions, such as Cayman or Panama, do not.
- Appoint yourself as the manager of this offshore LLC and open a bank account that offers you the investment options you seek.
- Instruct your new US custodian to invest your retirement account into your offshore LLC. They’ll wire your cash to your offshore bank account (which is in the name of the IRA LLC). Note that “like kind” transfers are not typically available. You should be sending cash, not stocks, offshore.
You now control all of the investment decisions of your retirement account. If you want to diversify out of the US dollar, hold 20% in physical gold, or buy international real estate, go for it. The account is under your control and you are no longer beholding to the commissioned broker.
Of course, there are a few rules you must follow. You knew this was coming, right? Of course… we Americans must follow IRS rules even when abroad.
But, don’t worry… they aren’t too tough.
Most importantly, you are to manage the IRA for the benefit of the retirement account. Act as a professional investment advisor would, make decisions that are in the best interest of the account, and never take a personal benefit from your investments.
If you’re trading stocks, this is usually no big deal. Conflicts of interest are more common in real estate transactions. If you buy a property in your IRA, you can’t live it it… even for one day. This would be an improper benefit.
There are a few prohibited investments to be aware of:
- If you buy gold, it must be 99% pure. That means you can buy gold bullion and certain high quality gold coins. I suggest you stick with bullion or US Golden Eagles to avoid being tripped up here.
- Don’t buy collectibles… you might receive some “benefit” from a Matisse hanging in your study, so collectibles are out.
- Stay away from life insurance contracts. I think this one came about in the 1980’s when viaticals were the craze… and when spouses were taking out life policies on each other. Anyway,they are prohibited investments.
If you avoid “self-dealing” and prohibited investments, you’ll do just fine as a newly minted IRA manager.