{"id":10615,"date":"2017-03-28T09:00:04","date_gmt":"2017-03-28T13:00:04","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=10615"},"modified":"2020-09-18T15:38:19","modified_gmt":"2020-09-18T20:38:19","slug":"take-defined-benefit-plan-offshore","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/take-defined-benefit-plan-offshore\/","title":{"rendered":"How to take your defined benefit plan offshore"},"content":{"rendered":"
If you\u2019re eligible to take distributions from your defined benefit plan, you can move it offshore. Eligibility is usually because you\u2019re of retirement age or because the defined benefit plan is from a previous employer. Another way to say the same thing is that <\/span>you can move any defined benefit plan offshore that\u2019s vested.<\/b><\/p>\n Also, some defined benefit agreements include terms that allow you to close or terminate the plan. If eligible to close the plan, then you can take it offshore. <\/span><\/p>\n With that said, the first step in determining whether you can take your defined benefit plan offshore is to ask your plan administrator. If you\u2019re creating a new plan now, be sure to write in clauses that allow you to go offshore. <\/span><\/p>\n I should also point out that you can take a <\/span>401k account<\/span><\/a> offshore. A 401k A is a defined contribution retirement plan where the employee participates in the plan with his own contributions. <\/span><\/p>\n The employer may match these contributions up to a certain percentage. If the employee is in a position to receive distributions from the 401k plan, such as when he leaves employment with the company sponsoring the plan, he can roll the 401k money into a traditional IRA without incurring income taxes or penalties on the rolled-over amount and then go offshore. <\/span><\/p>\n As I hinted at above, both the defined benefit plan and the 401k use the same method to get offshore. They\u2019re converted into an IRA and then moved to an <\/span>offshore IRA LLC<\/span><\/a>. Any defined benefit plan with cash value which has vested can be converted into an IRA. Any defined benefit plan that can be converted into an IRA can be taken offshore. <\/span><\/p>\n Once you\u2019ve confirmed that your defined benefit plan can be converted into an IRA, you can take the following steps to get the money offshore: <\/span><\/p>\n The LLC will be owned by your IRA and you will be the manager of the company. As a result, once the cash is wired from the custodian to your IRA LLC, you\u2019re in complete control of the account. You make the investment decisions and you send the wires or write the checks. <\/span><\/p>\n As a result, you can maximize diversification, returns, and asset protection. <\/span><\/p>\n Your assets are protected from creditors and US judges because they\u2019re outside of the United States. So long as you select a bank that doesn\u2019t have a branch in the US, your cash is safe for levy. <\/span><\/p>\n And you can maximize diversification by investing in multiple currencies, foreign real estate, and generally reducing country risk by holding your capital outside of your home country. You can diversify further by purchasing physical gold (subject to <\/span>IRA rules<\/span><\/a>), private equity, and other non correlated investments. <\/span><\/p>\n You\u2019ll find that returns in foreign markets are significantly higher than in the United States. 10% to 12% on relatively safe investments is not uncommon in Latin American. <\/span><\/p>\n One of the most popular non correlated high return investment for IRAs in 2017 is hardwoods. For example, the return on teak has been around 15% per year for the last decade. For this reason, teak was selected as <\/span>Best Offshore Investment in 2017<\/span><\/a>.<\/span><\/p>\n Another popular use of defined benefit plans offshore is to purchase residency for the owner. You can get residency in Panama with an investment of $20,000 and Nicaragua with an investment of $35,000. Both of these come with residency and you\u2019ll need to pay legal fees out of your pocket, not from the IRA account, to avoid self dealing. <\/span><\/p>\n Residency in Nicaragua<\/span> is great if you can put in the time. You need to spend 6 months a year for 2 years in country to keep up your visa. Then, after two years, you can apply for citizenship. Once you have a second passport, you can spend as much or as little time in Nica as you like. <\/span><\/p>\n If you can\u2019t spend the time, then go with <\/span>residency in Panama<\/span><\/a>. This country has no physical presence requirement and you can apply for a passport after 5 years. <\/span><\/p>\n\n
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