Back in 2015, 30 million Americans tapped into their retirement funds to pay for unexpected or emergency expenses. In fact, it was the 50-to-65-year-old baby boomers who reported being worse off financially and had to resort to their 401(k) plan early. This is the situation for millions of Americans nearing retirement. And retiring funds early is one of the worse moves you can make. So, if your retirement account isn’t meeting its potential growth or expectations, it’s time to consider a different strategy. What many Americans are doing is using their IRA retirement account to invest in Mexico’s Riviera Maya. It turns out that using your IRA retirement in Mexico is more commonly applied than you think.
Understanding IRA Accounts
Americans have three commonly-used IRA accounts:
- Traditional IRA. This offers immediate tax breaks. Contributions going into this type of retirement account are pre-taxed, generally coming from your paycheck. Then, when money is pulled out, it will be taxed at a rate determined at the time.
- Roth IRA. This offers no tax advantages when contributing. The tax advantages are when you elect to take money out. Your earnings are tax-exempted when specific qualifications are met.
- Self-directed IRA. This can be implemented by converting a Traditional or Roth IRA. This type of IRA account can give back control to its owner, as its name implies.
A self-directed IRA is a great way to leverage control of your retirement funds and diversify incoming contributions from several unconventional resources. Most all other IRAs are funded by stocks, bonds and mutual funds. A trustee or custodian in your behalf is allowed to invest your money in hard and/or tangible assets like real estate, precious metals, and privately-held companies with the self-directed IRA. Converting either a traditional or Roth account into a self-directed IRA can be done fairly easily. The wait time shouldn’t be any longer than 30 to 45 days. You must follow specific guidelines to assure little to no tax paid, depending on the original IRA converted.
Using Your IRA Retirement Funds to Invest in Mexico
You ask yourself, “how does this relate to using my IRA retirement to invest in Mexico real estate?” Just imagine having the opportunity to increase the value of your retirement account 10 or more percent annually. Investing in Mexico’s booming real estate market can offer several financial rewards. There are people who are successfully bringing in favorable returns by purchasing a variety of properties in Mexico. With proper administration, abiding by all the self-directed IRA guidelines, and following Mexico’s real estate purchasing laws, you can take full of advantage of some incredible returns, as well.
Truth be told, there are some very tight stipulations regarding earned income going into the account, providing maintenance to the property, and using your investment for personal use. All revenue generated minus any local, state and federal taxes must be deposited directly into the IRA’s account. You must hire a qualified provider for all maintenance performed to the property. Also, you may not use the property for personal use, unless it is business-related. The IRA allows you to invest in order to increase and save for your retirement. But you cannot directly benefit from it. For now. But again, this is an investment that is generating income for your financial positioning in years to come.
Be One of Millions Securing Their Financial Future
A few more important notes to consider when converting to a self-directed IRA are to use a reputable firm or banking institution that specializes in these types of accounts. Certain trust companies could also provide this type of service. We recommend all expenses and incomes from the property are managed in one single account, as well. Income going into a self-directed IRA can be tax-exempt in the United States, as well as Mexico. We recommend you hire a professional tax accountant that fully understands and is in-line with both country’s tax laws. This might sound a bit confusing, but when you see your money grow in leaps and bounds, you will understand why so many Americans are using their IRA retirement accounts to invest in Mexico.
Truly, investing in Mexico to save your retirement funds is not a terrible idea. Vacation rentals have been rapidly increasing in the area. And many people have seen great return on their investment – which is going directly into their IRA retirement account. Mexico’s Riviera Maya is one of the hottest markets for tourism today, and with such world-wide attention-grabbing events, such as the Golf Classic at Mayakoba, there is no shortage of foreigners flying to this turquoise corner of the world. Make sure to check out the thousands of options that are available to you so you can start building up your retirement funds and eventually, retire to the Riviera Maya yourself.
And remember, at Top Mexico Real Estate…we make it happen!