How To Use Retirement Funds To Purchase Foreign Real Estate
Accessing Your Retirement Account To Purchase Real Estate Abroad
Oct. 12, 2009
Panama City, Panama
PLUS:
- Mac In Panama?...
- Report From Chapala...
- Heeding The Call Of The Tropics...
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"What in the world is a nice, retirement-aged couple
from Vermont like us doing building condominiums in Granada, Nicaragua?"
Our friend Jay Snyder, who currently divides his time between Granada, Nicaragua, and a little town in Vermont, gets this question all the time. Here's how he replies:
"It started about five years ago. After some 40 years building and operating the Landgrove Inn in Vermont, our thoughts turned to semi-retirement and change. We intended to sell our country inn business, and that prospect put us face-to-face with the big 'What Next?' question.
"About this time, I started reading Kathleen Peddicord's articles on Central and South America. I wanted to see these places. I wanted to know them firsthand. It was as though I could hear a voice saying, 'Go south, old man.'"...
>>> Continue Reading Here
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Dear Live and Invest Overseas Reader,
Our offices are crazy busy this morning as we work to contact all the new Panama Circle Members we welcomed over the weekend and, at the same time, to finalize preparations for our Global Real Estate Profits Summit, kicking off here in Panama City this Thursday afternoon. (A few places remain in the room, and the program resident global real estate investing expert Lief Simon and his colleagues have put together exceeds expectations. Details here.)
Meantime, the mail is piling up:
"I haven't heard anything about Lake Chapala, Mexico, lately. What is happening there? I would like to know something about it, as I'm planning to visit the area next year in May."
-- Corinne C., United States
Mexico Correspondent Akaisha Kaderli, who, with her husband, has been spending time in Ajijic and Lake Chapala for years, has written of retiree life in this part of the world here ("The Chapala Bailout") and here ("Retire To Caleta de Campos, Mexico"). In addition, Akaisha updated us recently regarding the state of the lake itself. (This is one of the most common questions about Lake Chapala. Where has all the water gone?) Akaisha explains:
"The water levels at Lake Chapala are currently the highest my husband and I have seen in all our years spending time in this region, and with the new malecon and all the improvements that have been made lakeside, it looks quite charming.
"Still, Lake Chapala isn't the same as a recreational lake north of the border. It appears muddy. In fact, though, it's clean. Recent water quality testing indicates that Chapala's water is three to four times cleaner than that offshore along the coast of California.
"Chapala is a cyclic lake. Some years, the water level is high; other years, the lake bed is almost bone dry. You need to be prepared for the down cycles, or you could become very disenchanted.
"Hundreds of locals swim in the lake and eat the fish caught out of it. Most expats living here, though, don't."
"I would be interested in your Overseas Retirement Letter and various Country Retirement Reports; however, I'm wondering if the information these include related to residency, visas, property ownership, etc., is applicable to Canadian and European citizens, or only Americans?"
-- Jacques M., Canada
The details included in every issue of our Overseas Retirement Letter and in every Country Retirement Report to do with residency, visas, property ownership, etc., with some particular exceptions, would be applicable to anyone of any nationality. In general, the rules are the same for all Western passport holders, including citizens of the EU, Canada, and the United States.
Editor's Note: During this First Birthday Celebration month, you can subscribe to our Overseas Retirement Letter for just US$1. Details here.
"I have been reading your newsletter for some time, and I remember seeing a budget for Panama somewhere. Yet I cannot seem to find it again now.
"Can you help?"
-- Ken R., United States
Here you go...two budgets for living in Panama.
"I greatly enjoy your articles. They are a great information source, and the advice is most helpful.
"I am a textile designer living in the San Francisco Bay Area. Apple/Mac computers and products are a necessity for my business. Nowhere in my reading has anyone mentioned anything about the availability of these kinds of products in Panama. I, and I suspect others, would appreciate knowing if these things are available in the country."
-- Audrey R., United States
Resident Panama Editor Rebecca Tyre replies:
"Panamanians are big consumers of Apple products. There is a Mac store in Multiplaza Mall in Panama City and a big Mac superstore on Calle 70 in the San Francisco neighborhood of downtown.
"In other words, if you're looking for Mac products in Panama, you'll have no problem finding them!"
"We are still a few years away from making the jump but are starting some rudimentary planning. I enjoy your daily e-mail, Kathleen. As the weather turns colder here in the north, the lure of the Tropics becomes part of our daily dreams and conversations..."
-- Guy M., United States
"Kathleen, we have enjoyed your newsletters for many months and have learned more than we could have hoped for from them. Yours is a refreshing approach. I like what you say and how you say it. You cut to the chase and get the job done and back it up with factual information a person can put his trust in. This is what Kathleen Peddicord is to us. I have many files on my 'saved list' for various countries. We hope to visit some of these places someday. We recommend your site to all who share these interests.
"My wife and I moved to Costa Rica to follow a dream of starting a new life and a new business there, after losing a successful business, several properties, and most of our money to the U.S. housing bubble burst. We have done just that. We created Bonita's of the Valley, S.A., two years ago in Costa Rica. We are a small, unique (original art only) company. Bonita is the creator, along with our wonderful artist, Max. I try to make it all work. Our work can be seen on Google's Picasa 3 in our public album, Bonita's of the Valley.
"We have just returned to the United States, where we plan to spend 18 months finishing our website and getting to know Santa Fe, New Mexico, where we hope to find buyers. We have kept a studio in Costa Rica, where we spent many hard days learning what to do and what not to do, and now we take our next small steps to see if we are on the right path.
"We have many more plans and ideas and dreams and lots of time to do it right. We have done all this on our combined Social Security only, and we are still only in our early 70s. Tell your readers to take heart and never to lose faith in their dreams.
"Thank you, Kathleen."
-- Gene and Bonita S., United States
"Kathleen, I read your e-mails with great interest and am considering investing in a property in Central America. I am not yet of retirement age but have US$300,000 in a retirement account and am wondering if you know whether those retirement funds could be accessed to purchase an investment property outside the United States. I think this can be done under certain conditions, provided the property is not for one's own use. Can you shed some light on the topic?"
-- Ralph H., United States
That's it precisely. Your U.S. retirement account can be drawn upon for the purchase of a piece of real estate in a foreign country as long as the property is not intended for personal use. Other restrictions can apply. Most important: The funds must be in a self-directed account. This means you won't be able to do what you're thinking about doing through your regular retirement account broker. Our recommended expert on the topic is Tom Phelan, with much experience at this. You can reach him here.
Kathleen Peddicord
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