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Is it at all possible to “roll over” Retirement accts such as 401k to a bank or stockbroker in Costa Rica or Panama? We are relocating soon to CR, and may lose our home to foreclsure if we can’t sell it, but I would like to protect my retirement accts as that is what we plan to live on..any information would be greatly appreciated!
I have not worked on Wall Street since 1996 so my knowledge is not particularly up to date however, it’s my understanding that an IRA can NOT transferred out of the USA and…
To be blunt, even if you could, there isn’t a bank or a stockbroker in Costa Rica that I would recommend if that was possible.
Incidentally, we are waiting on a new article from the CEO & Founder of the Pensco Trust http://www.penscotrust.com/ about buying Costa Rica real estate in an IRA.
Scott Oliver – Founder
WeLoveCostaRica.comFirst off… retirement plans are for the most part protected from court (bankruptcy and foreclosure) action and attachment… you might consult with an attorney to confirm that this isn’t an issue in your particular case. If that is the case “physically” moving the accounts offshore won’t be an issue for you.
As far as Scott’s comments… you might not be able to transfer the “account” itself offshore but you can do so with the assets. Look into a self-directed IRA that provides you with an underlying LLC that would allow you to invest your IRA assets in real estate (domestic and foreign) and a great variety of other investments you wouldn’t normally think of as being available to an IRA.
You are not (yet!) prohibited from using such a structure to effectively move your assets offshore. Pensco is one such company setting up these type plans… and there are others. I don’t have a plan with them nor can I attest to their services. I use another company but I’m sure they’re all much the same, check the fees and cost of each. The rules are complex but simple once you understand the logic and structure of the plans. Having worked for the Treasury/IRS at one time I’m surprised that they have not yet put these type plans on the radar for further review although they’re perfectly legal when executed properly. But there’s always tomorrow.
Do your homework and you’ll find there are a number of ways of protecting what you have and making it work for you! The self-directed IRA might be just what you’re looking for!
Edited on Aug 12, 2009 17:35
Thnk you both for the informative insight! I realize we’re selling our home in California at the worst time, but I’ve heard it’s only going to get worse when ARMS start adjusting again next year; I don’t want to lose our retirement savings, if I don’t have to and we don’t know if we’ll end up short-selling or foreclosing; anyone who “has been there done that” insight advice would be appreciated!
It’s not only the ARMS that will be coming home to roost shortly… there’s another bomb waiting in the wings… Commercial Real Estate loans! With money tight… lenders making you jump through hoops… and business down… there’s going to be a BIG implosion in that market, in fact it’s already started. Many big malls and retail centers can’t keep tenants which will make it even harder to refi or to make the payments they have now.
Then there’s all the unemployed people out there that will (or have) run their benefits out and are now not “unemployed”…. the true unemployed number right now is close to 20% when you include those that the government number crunchers seem to think don’t count anymore. This is to say nothing of all the folks just holding on that give up when they exhaust their savings and credit cards trying to ride this mess out!
A short sale or foreclosure might be your only option at this point since the market in California was one of those that was SOOOOO over priced and will be near the rear in the recovery when and if it happens. You may need another lifetime to see it however! It might be best to bail with what you have and make the best of that which you can save!
Scott’s article last year about the coming economic meltdown generated some great discussions… many of us that sided with him were called doomsdayers… now it just seems we were a little bit better informed then most!
Best of luck… I’m sure there are some folks here that are (or have been) in your situation recently that can tell you what they did. I know one fellow in Arenal that bailed from the Nevada market (another major mess) that was in a awful tight spot very similar to yours. He’s a hard worker that had always paid his way in life a self made man that asked for nothing. When things went as bad as they did through no fault of his and he did his best to make it right and got nowhere he finally just gathered up what he could and let the banks deal with the mess. Some folks will no doubt look at this as wrong… but then again the banks and the whole real estate Biz were the one’s making all the money in the great “gold rush” market of the last several years… and the folks buying and living in these homes were paying the freight… and in the end got left with nothing but the shaft!
Edited on Aug 16, 2009 14:44
Boy! You’ve certainly hit the nail on the head with regard to retail real estate, imx. When we were in Michigan in May, we shopped at the upscale mall in Lansing and what has traditionally been a very busy and successful outlet mall in Birch Run. For years the outlet mall has had a long waiting list for space. This year, both have substantial vacancies and no apparent takers. Even well known chains have bailed out and the malls can’t even attract the lower end “junk” occupants.
What’s more, both malls’ parking lots were largely empty on clear, sunny weekend days when you used to have to search for a parking spot.
I sure wouldn’t want to be holding the mortgages on these places.
1. Street Journal – 15th August 2009 Hotels Deliver Some ‘Jingle Mail’
‘Jingle mail” isn’t just for homeowners anymore. From San Diego to Dearborn, Mich., an increasing number of hotel owners in the U.S. market are simply walking away from money-losing properties and forfeiting them to lenders.
Distressed noncasino hotel loans now cover more than 1,000 properties with a cumulative loan value of $16.8 billion, according to Real Capital Analytics, a real-estate research company. That figure encompasses delinquencies, foreclosures, bankruptcies and restructurings of securitized mortgages in addition to loans from banks and other institutions…”
2. And you read my article on pensions? ‘Is Your Pension Plan Safe? Or is it the next big ‘surprise’?’ Which you can see at [ https://www.welovecostarica.com/members/1952.cfm ]
3. Commercial Real Estate Crash Would Cripple U.S. Banks [ http://www.huffingtonpost.com/sheldon-filger/commercial-real-estate-cr_b_232293.html ]
4. Bair: Bank Failures Ahead 10 Times Worse. “FDIC Chairman Sheila Bair is predicting that the bank failure rate will increase tenfold, according to a U.S. Senator.
Bair said up to 500 more banks could fail, Sen. Jim Bunning, R-Ky, said in a meeting, reported Dow Jones Newswires.”5. Is this why “Bob Chapman [Internationalforecaster.com] revealed that the US State Dept has advised embassies worldwide to stock up on a year’s worth of the local currency in anticipation of collapse of the US dollar. Look for a temporary banking shutdown timed for around September 2009.” [ http://www.scribd.com/doc/17434268/0530099IF ]
Scott Oliver – Founder
WeLoveCostaRica.comAs of Friday, August 14, 2009, the
FDIC is now BankruptFrom a starting point of US$53 Billion in 2008 – through the 77 bank failures this year alone – the DIF has dwindled to zero.
Just in case you’re having trouble, your first reaction should be a mixture of shock and disgust. How – after being paid decades of insurance premiums from all of America’s deposit-taking institutions – could the FDIC go bankrupt after the first wave of bank failures?
How is that even possible?
Well, first…they haven’t exactly been “collecting premiums” per se.
That’s right, in good times the FDIC has one job. To bother banks for comparatively tiny insurance payments. But for most of the time between 1995 and 2006, they collected nothing. Zero. Apparently they had no authority to force banks to pay their premiums, so they simply disregarded the job.
Then, as soon as the crisis broke in American banks, the FDIC more than doubled its liabilities…taking their maximum coverage from US$100,000 per account to US$250,000.
Was there a corresponding crackdown on premiums? Did they start charging banks twice as much for the insurance, or at least collect the missing premiums from the past decade?
Of course not.
Instead, they were comfortable with what dwindled to a .014% coverage on their assets. That is to say that for every dollar the FDIC covered, they had 1.4 cents in reserve to insure that dollar.
Now the 1.4 cents is gone.
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