If you want to diversify your IRA offshore or out of the US dollar, time is running out. From what I hear, Obama is looking to renew his push for myRA and forcing even more Americans to invest their IRAs in treasuries.
If you’ve forgotten the Obama myRA, here’s the new site they rolled out. The Obama retirement account plan is all about “helping” Americans save more and save more securely.
myRA is founded on two principles: 1) we sheep are incapable of selecting our own investments, and 2) we should be forced to invest in the most secure investment available – US treasuries. Fortunately, the government is here to watch over us.
The myRA program is for young Americans who don’t have a company sponsored plan. It will indoctrinate them into a government managed retirement account and is the test case for a nationalized retirement account system. Once they work out the bugs in the system, myRA will be rolled out to employer sponsored plans.
Most expect the process to go as follows:
- myRA program acceptance,
- Employer plans requiring an ever increasing percentage of treasuries,
- Eventually the majority of retirement accounts are in US government securities, and
- Prohibiting the placement of retirement account assets in “unsafe” investments like stocks, bonds, real estate, etc.
Somewhere in between steps 1 and 2 above, the government will prohibit the movement of retirement assets offshore. The program will begin with a media blitz on how risky foreign investments are for America’s seniors and will focus on 1 or 2 pensioners lost their shirts offshore.
Then the government will step in to protect us from ourselves by preventing the formation of LLCs owned by retirement accounts. The coupe de gras on offshore IRAs will come as a prohibition of the transfers of retirement money and assets out of the United States.
Note that nowhere in this series of events is the forced repatriation of existing retirement accounts. That’s because I, and most others who study this situation, believe those who are offshore now will be grandfathered in. We have a few reasons for this belief:
First, vast quantities of generational wealth are stored in offshore IRA LLCs. America’s wealthiest families are fine with a program that protects us sheep, but not when it impacts them.
The most well documented of these accounts was back in the 2012 presidential election. Offshore IRA LLCs were in the press that year because Mitt Romney held his IRA investments abroad. Click here for a 2012 article from the Wall Street Journal.
Second, these offshore structures have specific tax usages / benefits for offshore IRAs. Forcing existing IRA LLCs back to the USA would cause havoc with the Unrelated Business Income Tax section of the US code. I won’t bore you with the details, but suffice it to say, this would force hundreds of millions of active investments to be unwound.
If you want to read on how to use an offshore IRA LLC structure to minimize Unrelated Business Income Tax from leverage, here are two thrilling articles on this topic:
- Eliminate Tax on Leverage in your IRA with UBIT Blocker
- Eliminate UBIT in Your IRA by Investing Offshore
Third, many offshore IRA LLCs are invested in real estate and other assets which can’t be seized or easily liquidated to comply with a demand to repatriate. Attempting to bring back offshore IRAs would create an administrative and media nightmare that the government is likely to look to avoid.
For these reasons, I expect existing offshore IRA LLCs to be granted an exception to the new legislation. You might not be able to add to them, but whatever is offshore when the hammer comes down will be allowed to remain there.
Note that this opinion is not based on politics, but on experience backed by research. It won’t matter who our next president is, the demands of our deficit and our currency bubble must be served. The easiest way to shore up the damn is to force retirement accounts to invest in US treasuries and begin again with the unfettered printing of money.
If Obama doesn’t nationalize your IRA through executive order, either Trump or Hillary will be forced to keep the engine running. Expect both to expand on myRA and then require you to invest your retirement account in US Treasuries.
If you want Uncle Sam to manage your investments for you, then do nothing. If you want to take control of your retirement account and diversify out of the US, then you need to act quickly. The window of opportunity on taking your IRA offshore is closing fast.
I hope you have found this article on the future of our retirement accounts helpful… or, at least, food for thought. If you would like more information on how to take your retirement account offshore, see my Self Directed IRA page.
You can also reach me directly at firstname.lastname@example.org or (619) 483-1708 to discuss moving your retirement account offshore.