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Take Control of Your Retirement Savings …By Moving Your Nest Egg Offshore
I’ve managed my money my entire life, never once using a private money manager.But in 2010 after more than 17 years, I realized that the 401(k) I had accumulated represented a large piece of my retirement assets. I also knew that America’s finances were – and still remain – in a horrifying state. I was worried about having to manage this sizeable chunk of cash for the next 25 or 30 years, and keeping the entirety of my nest egg stateside in a financial system that is so structurally flawed.
So, I traded my 401(k) for a rollover IRA and took my retirement account offshore.
Turns out I am not alone. A small but growing number of Americans are doing the same. They, like I, recognize that moving some retirement money overseas erases worries about the ongoing, long-term decline of the U.S. dollar by diversifying their cash into stronger currencies and more functionally sound economies.
Going offshore is the epitome of fiscal prudence and preparedness.
A New Retirement Home … For My Money
For me, preparation means putting a big slug of my retirement assets outside the U.S.
In October, I opened an IRA at Jyske Global Asset Management, or JGAM. It’s the U.S.-client-focused asset-management arm of Jyske Bank, Denmark’s second-largest bank.
By hooking up with JGAM, I’m taking my money outside the immediate purview of U.S. lawmakers.
JGAM has no offices in the U.S., but it is registered with the Securities and Exchange Commission to work with American clients, so you’re not flouting any U.S. laws. And while JGAM has linked up with a U.S.-based IRA custodian in Texas, the firm holds the assets physically in Copenhagen.
Now, because JGAM does work with a U.S custodian, my money probably remains within reach of U.S. retirement rules. But the easiest target for lawmakers who might go after pension-plan assets is clearly the vast trillions of retirement money housed onshore.
Lawmakers, if they do make a move to nationalize pensions, might not chase the relatively small amounts of offshore money – though there are no guarantees. And if they do … well at that point it’s clear the U.S. is deeply in trouble and I would likely make the decision to break my IRA, pay the taxes and penalties, and keep my money safely overseas.
But even if Congress never makes a play for pensions, then I have other reasons to go offshore with my IRA.
JGAM provides me with what I’ll call intellectual diversification. Non-American portfolio managers see the world from a different perspective than do money managers sitting in New York, L.A. or Boston. As such, along with asset and geographic diversification, I get someone who’s thinking about the world differently. To me, that’s equally valuable diversification.
Get Your Money Out of Harm’s Way in Six Weeks or Less
The process of opening an account at JGAM takes four to six weeks, which includes a 30-day “cooling off” period mandated by Danish authorities, just in case you change your mind. You can start the process online by visiting jgam.com or contacting my friend Thomas Fischer at fischer@jgam.com.
JGAM requires a $100,000 minimum. All accounts below $1 million are discretionary, meaning JGAM’s portfolio managers make all investment selections. But you can provide some level of input if you have certain requests, like you want none of your money held in U.S.-dollar assets.
Services are fee-based only, so JGAM will not load your portfolio with investments for which it receives incentive payments from third parties you don’t know about. The annual fees charged are between 1% and 2% of the assets under management, depending on the size of the account.
You will also pay the trading costs imposed by the broker-dealers JGAM uses to place trades (Jyske Bank or Morgan Stanley), and that will add roughly an additional 1% on an annual basis.
Costs are a hurdle any money manager must clear to keep clients happy. And JGAM is doing a good job of that. JGAM’s IRA accounts in 2010 gained between 7.5% and 9.1%, depending on whether you’re looking at the low-, medium- or high-risk portfolio.
A Home for My Money Abroad
I’m not saying you should necessarily follow my lead. Everyone has their specific needs to address.
But I believe if you have a substantial nest egg in a 401(k), a 403(b) or an IRA, you should certainly think about the risks of keeping all your money inside a deeply addled financial system ruled by a fundamentally weak currency.
America, at the moment, is a place in turmoil and transition. No one can say where this road ends. But based on what I do see, I want my retirement assets out of the way of any potential wrecking ball.
And I found a home for them in Copenhagen.
Until next time, keep a global view…
Jeff D. Opdyke
Senior Editor
The Sovereign Individual
P.S. Taking your retirement nest egg offshore is only one of the many wealth-saving opportunities available to you around the globe. Click here to gain full access to our proprietary research on the latest strategies that could help you and your family live a better life.
Other Posts from the Author
- How to Get More Income from Your Investments - May 16th, 2012
- What My “Air-Route Indicator” Says About the Next Big Investment - May 11th, 2012
- Profiting from Asia’s Growing Thirst - May 9th, 2012
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