If you’re worried about what might happen under President Trump, you can take steps now to protect your retirement. Get your IRA away from Trump and into an offshore bank account, under your control.
I give this same advice to both sides of the isle. Whether you think Trump is the greatest, or the devil incarnate, my recommendation is the same: take steps now to protect your savings from what might happen.
No matter your party affiliation, you must see some level of risk with Trump. He’s going to do his best to drain the swamp and change the game. While this might work out great in the long term, there are sure to be growing pains.
According to Oxford Economics, President Donald Trump will either be a disaster or the best thing ever for the global economy. If things go south, do you have a safety net? Do you have a nest egg offshore and out of U.S. dollars? Are you diversified internationally as a hedge against risk at home?
Most of us have our cash in two investments… our home and our retirement accounts. While it’s become difficult and costly to borrow against the equity in your home, it’s easy to move your IRA out of the United States and into uncorrelated investments.
You can move your vested retirement account out of the United States and into an offshore IRA LLC by filling out a few forms. No travel required and no hoops to jump through.
Once that money is out of the country, you’ll have checkbook control over your retirement account. You can make whatever investments you like. You’ll be the only signor on the bank account and the only person authorized to act on behalf of your IRA.
Of course, you’ll need to follow all of the U.S. rules for IRA accounts. The objective here is to take your retirement account offshore and maintain the tax benefits (tax free for a ROTH and tax deferred for a traditional IRA).
While there are all kinds of rules you can read about here, the bottom line is that you must treat your offshore IRA LLC account just as a professional trader would. You can’t borrow against it, can’t benefit from it, and must always look to the best interest of the account, and not your personal needs.
So long as you transact at arm’s length, and follow the few investment rules (such as buying only certain types of gold in an IRA), you’ll be in good standing with the IRS. Don’t do anything silly, like buying a home and living in it, and your IRA LLC will operate smoothly.
The process of getting your IRA away from Trump is a simple one. Again, this is not meant as a political statement. I’m focused on hedging risk of the unknown by putting some of your nest egg offshore. Leave whatever you feel comfortable with in the United States and take the rest off the table.
To move your IRA out of the country, we first set up a U.S. compliant offshore IRA LLC. This limited liability company is owned by your IRA account and you’re the manager of the company. You’re the only signor on the bank account as the manager.
Then you move your retirement account(s) from your current custodian to one that allows for international transactions. Most custodians don’t allow you to go offshore because they want you to invest in their products… not the ones with the highest returns, but those with the best commissions.
When your cash reaches your new custodian, you instruct them to invest it in your offshore IRA LLC. They transfer your money to the LLC and now you are in control. Your custodian has no authority over your offshore bank account.
Note that you’ll need to sell all stocks and assets in the account prior to going offshore. Like kind transfers are generally not allowed in offshore brokerages. Keep it simple and send one wire to the LLC.
You can only move “vested” accounts offshore. These are typically IRA or 401-K accounts from a previous employer. If you’ve been at the same job for 10 years or more, it’s possible some of your retirement has vested.
It’s also possible to transfer defined benefit plans or other complex pensions into an IRA LLC. If you can convert your defined benefit plan into an IRA, you can move it offshore. You’ll need to check with your plan administrator if a rollover or conversion is available.
You can place multiple IRAs and 401Ks with the same owner in one offshore LLC. Also, a husband and wife can use one offshore LLC for all their accounts. There are reason why large accounts will want separate LLCs, but it’s possible to place them all in one structure.
The reason you might want multiple LLCs for multiple accounts is that your LLC must invest as a single unit. You can’t segment your investments within one LLC.
For example, you have a ROTH with $100,000 and a traditional IRA with 300,000. You invest $50,000 in teak wood in Panama (a popular investment with many IRA clients). 25% of your investment will be attributed to your ROTH and 75% to your traditional account.
You might want a different allocation ratio. Maybe you prefer higher risk and higher returning investments in your tax free ROTH and your more conservative investments in your tax deferred traditional account. By using two offshore IRA LLCs, one for the ROTH and one for the traditional, you can allocate your investments between accounts.
I hope you’ve found this article on how to get your IRA away from Trump to be helpful. For more information on how to move your retirement account offshore, please contact me at firstname.lastname@example.org or call us at (619) 550-2743. All consultations are free and confidential.
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