U.S. stock markets have rallied recently. If you’ve recouped some of your losses, now could be a good time to consider diversifying a portion of your IRA funds out of U.S. markets by putting them into a home—maybe a winter retreat—overseas.
You can think of it as an investment...or as an insurance policy. There’s no saying what the U.S. markets will do over the next few years and diversifying internationally this way can help limit your U.S. exposure.
The good news is: You can find the property of your dreams anywhere in the world, purchase all or part of it with your retirement assets (gaining the tax advantages that delivers), and eventually take ownership of it—completely legally.
The IRS allows a great deal of flexibility when it comes to investing the assets of your retirement account. As a U.S. citizen, you can use your IRA or other self-directed retirement account to buy international real estate.
The rules governing the ownership of real estate are simple. You can own virtually any kind of real estate you could name in your IRA or other retirement account, including: raw land, condos, office buildings, single-family homes, multi-family homes, apartments, and improved land.
You can own the real estate fully, you can purchase an option on the real estate, or you can buy outright using a land trust, L.L.C., or similar entity.
All of these options are allowed for the kind of investment I’m describing. You can pay for the property in full using retirement assets—or you can finance it.
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