off shore IRA? Moving money out of US?

[Alan]

Quote:

Originally Posted by luckydude Yes, for US citizens, Switzerland is no longer a good place to hide money thanks to FATCA. But there are still plenty of dirty money from other parts of the world for Swiss bankers to clean.

Maybe I missed that the OP is not a USC.

[sengsational]

Considering a non-US residency given horrific turmoil in the US, one should probably imagine that the country that looks ok now would probably drop even faster than the US. IOW, any financial contagion that put the US in a tailspin would decimate these other countries. This, based on the worldwide financial interdependence that I think is reality.

[jollystomper]

Quote:

Originally Posted by Aerides One of the things about the US is that changes are very slow and very incremental, and those that would be political suicide, like this idea, even more so. It would not happen overnight. It would begin as campaign rhetoric, and then even if it survived, would take a lot more than an executive order to happen. You'd get a huge runway to watch it unfold. And then even if it did, there would be immediate injunctions and appeals filed, and then tied up in courts for years. So, yeah, not something I'd bother with a plan for.

After the events of the last few years, I tend to agree with this less. The phrase "never let a good crisis go to waste" has, in my view, been executed at times to make things change very quickly because there is a "crisis" .

[Patricia Lyn]

OP here
Thank you to all the contributors to this thread. I’m learning a lot! I am a US citizen and I have never questioned the safety of our banking system. But recent events have made me wonder. I also agree that most other countries would tail spin faster than we would due to our reserve currency status.
The depositor insurance in foreign banks has never even occurred to me. Good point. Another thought while reading these comments is the overwhelming confidence most have about the reluctance of our government to touch any savings deposits of the US citizens even in dire times. I guess if times were that bad (ie major depression, millions thrown out of work, food scarcity, run away inflation, another pandemic only this time much higher death rate, civil unrest, etc) most other countries will get there ahead of us and we will have time to react.
Anyway, thanks for the mental exercise. You’ve given me a lot to think about and look into.

[luckydude]

Quote:

Originally Posted by Alan Maybe I missed that the OP is not a USC.

I think OP is USC. My comment about Swiss bankers was merely a general observation and not specifically directed at OP

[NW-Bound]

Quote:

Originally Posted by RobbieB Buy gold, bury in backyard.

Hey, I suddenly remember an exchange here on this forum when we talked about keeping gold hidden in plain sight.

I no longer remember what prompted it, other than I suggested making doorknobs out of pure gold.

Nobody would expect your doorknobs would be 24-carat gold, except that they feel heavy and cause the door to slam when you open or close it.

[HI Bill]

Quote:

Originally Posted by Patricia Lyn AJ888 and Spock, Thanks for the thoughtful replies. I guess you are probably right that the US is the cleanest dirty shirt. It’s just so scary to keep money in an institution that could either go under, suffer a devastating cyber attack, or an EMP even! All those years of living frugally in order to save for retirement…poof! I guess a government confiscation would be better than an EMP. maybe I should just stop looking at Zero hedge!

Maybe you should watch Mr. Robot. I'm assuming that VG, and all of the major houses have separate servers in different cities, and even if a mega-powerful EMP took out one, there would be back-ups. More likely to wipe them out would be a world-wide nuclear war, which I'm personally more concerned about than EMPs or even a cyber attack.

[HI Bill]

Quote:

Originally Posted by teejayevans It’s my understanding if you want to renounce your citizenship, you have to file one last tax return where they will tax all your unrealized capital gains, retirement accounts, etc. For most that’s going to be in the an expensive tax bill.

Yes, there's an "exit tax". "Do I have to pay taxes if I renounce my citizenship? If you are a US citizen and you decide to renounce your US citizenship this can still have substantial tax implications to you. The US imposes an ‘Exit Tax’ when you renounce your citizenship if you meet certain criteria.

Generally, if you have a net worth in excess of $2 million the exit tax will apply to you. This tax is based on the inherent gain (in dollar terms) on ALL YOUR ASSETS (including your home). You will also be taxed on all your deferred compensation—such as pensions at the time of expatriation.

The exit tax will also apply to you, even if your net worth is below $2 million, if you have not complied with your US tax obligations for the last five years. The $2 million trigger will not apply to certain individuals who are dual citizens at birth. But the tax will still be imposed if they have not met the five year tax compliance test."

[luckydude]

Quote:

Originally Posted by Patricia Lyn OP here Thank you to all the contributors to this thread. I’m learning a lot! I am a US citizen and I have never questioned the safety of our banking system. But recent events have made me wonder. I also agree that most other countries would tail spin faster than we would due to our reserve currency status. The depositor insurance in foreign banks has never even occurred to me. Good point. Another thought while reading these comments is the overwhelming confidence most have about the reluctance of our government to touch any savings deposits of the US citizens even in dire times. I guess if times were that bad (ie major depression, millions thrown out of work, food scarcity, run away inflation, another pandemic only this time much higher death rate, civil unrest, etc) most other countries will get there ahead of us and we will have time to react. Anyway, thanks for the mental exercise. You’ve given me a lot to think about and look into.

Some closing thoughts. If I had to pick a foreign jurisdiction for offshore diversification, New Zealand would be my pick:

Western democracy
English speaking
Geographically isolated
Stable government
Strong banking system (although no depositor insurance scheme in place)
stable currency
No capital gains tax
No estate tax
Multi-cultural but no major ethnic tensions
Temperate climate
Outside Auckland, low population density
Similar lifestyle to US
13-hour non-stop flight from West Coast
US residents can open bank accounts with local banks (subject to FATCA)

The only downside---New Zealand used to have no restrictions on foreign real estate ownership until 2018, when laws were amended to prevent foreigners from buying up residential property (and pricing out locals in the process). Now, foreigners can only buy units in new apartment developments but nothing else.

[SecondAttempt]

Please don't believe conspiracy theorists and con men. You live in one of the most secure and "rule of law" countries in the world. Anyone who suggests otherwise is an idiot or a scammer.

Do we have our problems? Yes of course. But the government cannot confiscate your money nor can the banks.

So someone came to your church or you saw a youtube video that scared you. Use your head. If he came to your church, time to quit that church because they are scamming you. If it was youtube, time to block whoever sent you that link!

I'm not trying to beliitle you or cause you to question your church or other social structures. But anyone who told you this crap is just after your money and you need to get far away from them!

[SecondAttempt]

Quote:

Originally Posted by Patricia Lyn Another thought while reading these comments is the overwhelming confidence most have about the reluctance of our government to touch any savings deposits of the US citizens even in dire times. I guess if times were that bad (ie major depression, millions thrown out of work, food scarcity, run away inflation, another pandemic only this time much higher death rate, civil unrest, etc) most other countries will get there ahead of us and we will have time to react.

No, please don't think this way. It is not about other people's confidence. This is the kind of thinking that could let someone else convice you. We have a constitution. That constitution prohibits the government from taking your property without just compensation. If someone tells you otherwise, they are lying to you. Probably to take you money. This is true even is he is your preacher or another church member.

Please educate yourself on the US Constitution! The US Constitution is the law of the land. It trumps every state law. Please understand, as hard as it may be, that whoever planted that idea in your head is far more likely to be after your money than the US Government.

[SecondAttempt]

Quote:

Originally Posted by Patricia Lyn \I’m learning a lot! I am a US citizen and I have never questioned the safety of our banking system. But recent events have made me wonder.

What recent events have made you wonder?

[Doingitwrong]

Quote:

Originally Posted by Alan In the UK you are not allowed to accumulate more than £1,079,000 in UK tax deferred pension accounts (doesn’t apply to foreign pension accounts such as IRAs). It is the UK equivalent of RMDs. It means that you should make withdrawals from your UK retirement accounts if needed to stay below that limit. In other words, RMDs are based on the value of the retirement account, not on age. In the USA if you don’t withdraw enough funds to match the RMD for your age you are also subject to tax penalties.

Makes sense. He did admit it was his mistake and he wouldn’t allow it to happen again. When he hits US RMD age, I’ll remind him of those.
Too much money in different countries with different laws for him to keep up with I guess.

[BMP2CPM]

I’ll chime in with an unpopular opinion.

1) there are valid reasons to consider this idea

2) While volatile, the closest thing to the “80s funds in a secret Swiss bank account” is Bitcoin on a cold storage wallet.

You can store and transfer funds anywhere in the world. If all the US banks collapse, your money is still on the block chain owned by the keys in your wallet. A bit of a learning curve but just watch Crypto Dad on YouTube.

Myself, I put small amounts of Bitcoin each month into a cold storage wallet, eg Ledger. I avoid all other types of crypto. If the dollar were to collapse, Bitcoin should dramatically rise in price.

3) A majority of my funds are in stocks, ETFs, and mutual funds. Most companies are international, so if the US dollar collapses, I still think most companies will do fine.

4) The US dollar is a very fragile system.

The high inflation is exposing the the inherent disadvantages of US currency not linked to anything.

Before we got off the Gold standard only one person in the household was the bread winner. Today almost everyone in the household has to be the bread winner.

Because of our monetary system, so much work has to be off-shored to hide how much value the dollar loses each year.

Most Americans can’t buy things today without credit. This was not the case when we were on the gold standard.

For the longest time, oil could only be bought in the US dollar. Now Russian oil can be bought in the ruble. There goes what little backing the US dollar had.

5) Don’t knock alternate news sources until you have tried them. They might be on to something. Main stream news media will never report the inherent disadvantages of our monetary system.

[VungTau]

I've spent most of my adult life overseas and had investments, cash and other accounts in Asia and Australia both while working and in retirement. I can tell you that there will tons of surprises, frustrations, risks and after all that experience, good and bad, I still keep my funds in the USA.

Plus, the US tax system requires you to pay on all your world wide income regardless where you reside. Plus they are getting better at tracking you down and forcing other countries to report on Americans residing/investing in their jurisdiction. You will save on state taxes but not federal.

[Old Microbiologist]

It isn't a conspiracy to think the US economy might collapse. It is also not outright ridiculous to think the US government might confiscate financial assets for whatever reason. As has been mentioned this has already happened several times in other countries including Cypress, Russia in 92, and Canada last year. Need I remind everyone the US has the highest debt to GDP ratio in the world and is doing pretty much everything they can to push the world into not using dollars and is provoking war in at least 7 countries now. Once the Saudis stop trading oil in dollars the support for the dollar is gone. Countries on the edge like India are already moving away toward the multipolar world and refuting the US hegemony and are buying oil in other currencies. Add in that the US has shifted from being a production-based economy to a services-based one, despite being oil-rich, is yet another problem not easily (or cheaply solved). The current political, leadership (in both parties) prefers to print money rather than deal with reality which only debases the currency. So, in real terms, this is not a remote possibility but actually likely.

However, being US citizens (not of the elite class who have different rules altogether) we are boxed in tightly. I live in Hungary and have several Hungarian bank accounts. We have all of our retirement savings at TD America usually in equities but currently 100% cash given the craziness unfolding everywhere. We are simply taking a break from active trading until things settle down. All of our banking transactions are reported to the FBI due to FATCA regulations. We are also very careful to note maximum aggregate amounts and when they exceed $10k which has to be reported. Yes, you can ignore it but at your own peril later on down the road. There are 4 required reports any one of which the IRS can use to "get" you if they want. If the amount in their estimate (not in reality or proven just claimed) exceeds $50k then you lose your passport and freedom of travel. It is for this reason many Americans have dual citizenship especially when living overseas.

Our next-door neighbor is Swiss and is the Director of the Swiss branch of a large American fund ($4 trillion is assets) and is very cogent on the rules etc. It is impossible for a non-Swiss citizen to open an account in Switzerland now. Even Swiss citizens living outside Switzerland can no longer have an account as happened with his parents (who died last year hence why he is our part-time neighbor). However, you can always open any account in any bank in Europe in Swiss franc denominations. We have US dollar account, Euro, and Hungarian Forint accounts. It is easy to move money between accounts in the same bank. But, in general, we keep the majority of our pension money in a US Credit Union. The other factor and generally safe is real estate overseas which is less risky but not zero risk. Hungary, where we live, is currently a semi-enemy of the US (by US reckoning not Hungarian) and I can envision the US doing something nasty to Hungary resulting in Hungary lashing back at US citizens living here. however, the political policies are certain to change as they always do, so predicting the future is virtually impossible. I rely on the greed of the US elite to keep a lid on the insanity.

All that said, I don't believe the US is going to collapse or the dollar falls to a worthless value (in reality it already is as a fiat currency). The US bankers and elite class will intercede before that happens. Remember also that the US Federal Reserve is a private bank not under government control. The countries we are picking fights with really do not want to destroy the US either. But, our political elites seem to be set on a course that is very dangerous for everyone. If it scares Kissinger then that should frighten everyone. That said there is no safer place to keep your money, especially if you are an American subject to FATCA rules than in the US now.

[luckydude]

Quote:

Originally Posted by Old Microbiologist However, being US citizens (not of the elite class who have different rules altogether) we are boxed in tightly. I live in Hungary and have several Hungarian bank accounts. We have all of our retirement savings at TD America usually in equities but currently 100% cash given the craziness unfolding everywhere. We are simply taking a break from active trading until things settle down. All of our banking transactions are reported to the FBI due to FATCA regulations. We are also very careful to note maximum aggregate amounts and when they exceed $10k which has to be reported. Yes, you can ignore it but at your own peril later on down the road. There are 4 required reports any one of which the IRS can use to "get" you if they want. If the amount in their estimate (not in reality or proven just claimed) exceeds $50k then you lose your passport and freedom of travel. It is for this reason many Americans have dual citizenship especially when living overseas.

FATCA was intended to catch the wealthy American tax cheats who stashed their money in places like Switzerland of Caymen Islands. The US hoisted it on the rest of the world to force all foreign banks to flag and report all US account holders over a certain $ amount. But the wealthy tax cheats have devised other ways to hide their assets from Uncle Sam, leaving regular, honest taxpaying US citizens living overseas to deal with consequences of burdensome reporting requirements.

Think about how many foreign banks are out there in the world, and how many US account holder reports are generated by them and sent to the Treasury Dept every year. It's probably in the tens of thousands. It wouldn't surprise me to learn that these reports are never looked at or acted upon. Why? Because it's not worth the time and expense of the IRS to come after some American living in, say, Germany, who forgot to declare his USD $20k account in some German bank to the Treasury Dept. The amount of additional revenue in terms of penalties and extra tax from such an account just wouldn't be worth the manpower, time and expense it would take to track him down. And they are certainly not going to go after the guy's passport. It's just not worth their time. The IRS wants to go after the big fish, the guy with $50 or $100 million undeclared account because that's where the money is, and the tax cheat with $50 or $100 million can afford to hire pros to devise complex strategy to hide his money so that he would never have gotten flagged by FATCA in the first place.

SAR (Suspicious Activity Report) that every US bank has to file for any transaction over $10k (e.g. cash withdrawal, deposit, etc.) is a good example of this type of "over-reporting". The Treasury Dept probably gets tens of millions of these reports every year. They can't possibly investigate every one of them, so they don't. The only time they will look at these is when someone is arrested on some serious federal charges. The arrest serves as a trigger point for them to look up the individual's banking history where additional crimes may be identified and used as additional charges (and leverage) to lean on the individual to confess or cooperate.

[luckydude]

One more note on the silliness of FATCA.

It's not in the interest of the foreign banks to rat out US account holders to the US Treasury Dept. They don't get paid or rewarded by the US for doing it, and they have nothing to gain by such enforcement.

Based on what I've read on this topic, the foreign banks simply ask an account holder who might be "US person" to declare whether he is a US citizen. If the account holder says no, he is not a US citizen, and he doesn't use any US contact info, address, phone number, etc., on his account, the foreign bank is simply going to take the account holder's word for it and move on. It is not their job, nor do they want to spend the time and the effort, to really do the investigative work to identify US account holders. They are just going through the motions and doing the minimum they can get away with by using a simple computer program to flag account of "US persons" based on obvious data info such as US address, US phone number, and generate a simple report to send to the US so they can say they are complying with FATCA. That's it.

[eyenitnoy]

Quote:

Originally Posted by Patricia Lyn Hello, Anyone have experience moving money out of the US? I recently looked into transferring our IRAs and Roth-IRAs to an off shore account. It’s really scary to think about since we have always had our money at Vanguard. We are currently very worried that if our economy crashes, the government will come after people’s retirement savings…currently the largest untapped source of money in our country besides the printing press. I know this sounds extreme but other countries are doing this at times and it could happen here. Any thoughts?

While I don't agree with your premise-that the government is going to "come after" people's retirement savings, for purposes of discussion, let's say that's going to happen. An offshore account won't help you one bit. As a U.S. citizen, the government can come after your money wherever it is located.

When you have foreign accounts, you have to report them. If you don't report them, the penalties are severe, both civil and criminal. And don't think for a second that the government doesn't have the tools to deal with the likes of us common folks.

I'd say if you were really that concerned, buy gold bullion and rare coins and things of that sort and keep them in your own vault. It's old school, but any bank account connected to the internet the government can come after.

The other option is to leave the U.S. now, and take your money with you. You can renounce your citizenship, become a citizen elsewhere and then be free of the reach of Uncle Sam. Of course, you will pay money on the way out, when you take money from your retirement accounts. And, you still have to file taxes for something like ten years. But the cord can be cut.

Of course, you would be subject to whatever your new country decides to do with you and your money.

My advice is to quit worrying so much. You are setting yourself up for a lot of headaches with this offshore idea. I'd drop it.

Pay your taxes as they are do, spend your money and enjoy your life.

[Old Microbiologist]

To be clear Boris paid his tax on capital gains for overseas residence and then surrendered his citizenship, thus getting out of it permanently. However, even surrendering your citizenship you are still encumbered to pay and file income tax returns for an additional 10 years.