Your Asset Category and Offshore Retirement Options


Your Asset Category and Offshore Retirement Options

At the most simplistic level, there are three categories of people based primarily on assets. The focus is on baby boomers living in developed countries such as North America, Europe etc.

The division line between each category is not scientific or that precise but most people can quickly identify their category. Each category has its own unique issues/problems for retirement and living in general. The question this posting considers is “how, and to what extent is it possible to change your current asset category?”

Category “A”

Category “A” couples/people are considered to be in the top 5 percentile based on total assets and net worth. Such couples have an absolute minimum of $1,000,000 in highly “liquid assets” plus considerable additional equity and assets in their personal residence(s), businesses and other investments.

Such people, clearly, have few if any difficulties enjoying their desired lifestyle virtually anywhere in the world. What has been somewhat surprising to me is the very large number of such people who have chosen Panama at the end of their careers.

Wealthy people move offshore for a wide variety of reasons. They are always looking for “best value for dollar” wherever it might exist including asset protection. Major corporations have been doing the same thing for generations to enhance profits and pay lower taxes. It would appear that Panama offers many of these advantages for such people.

Category “B” People

Category “B” people are probably in the 60th to 94th percentile of net worth/assets. They are typically well educated and have generally spent their careers working in the public sector with a generous pension plan or for a large corporation with a “defined” pension plan. Such pension plans will provide them with a substantial extra income on retirement and are additional to the normal government social security and/or old age plans available to citizens of most developed countries.

Including home equity, the average Category “B” couple as of 2013 might have accumulated liquid assets, beyond home equity, in the $100,000 to $400,000 range. Since 2007, home equity for the average American and European has typically declined significantly and remains about 20-25% less as of today. Canadians were a bit more lucky in terms of housing values.

Such couples can expect to retire in reasonable comfort with relatively few long-term lifestyle concerns primarily because of their enhanced pension plans. However, for most, there will always remain a certain caution in terms of cash flow and a reluctance to splurge.

Of the approximate 100 million baby boomers and “post boomers” just in North America, probably 35% are Category “B” types. They tend to be well-traveled and well-informed. These individuals are prime candidates for the “offshore solution” because it potentially offers them an instant doubling or even trebling of their quality of lifestyle while stretching their relatively limited savings following the “Great Recession”.

Category “C” People

The Category “C” couple/person has the least interesting retirement options once the last paycheck is cashed which for the USA is about age 59. Category “C” people occupy the bottom 60th percentile based on net worth and liquid assets. With only a modest Social Security check on retirement and other minimal income supplements they understand that they could be looking at a steady decline in lifestyle and possibly even a “relapse” unless, of course, they keep on working which is what many have decided to do.

This category of person/couple typically pays higher than average medical costs because of long term minimal health maintenance, particularly in the USA where so many have been under-insured for so long. This person is probably aware that her retirement years may be subject to financial and health care risks beyond her control.

Most books on financial and retirement planning never even mention this category because Financial Planners cannot afford to spend time with anyone having liquid assets of less than say $250,000. Often $1,000,000 of liquid assets is the minimal trigger point for receiving serious consultation services from these professionals.

It seems like a bad dream, but there are always options ….

Why not just Change Your Category?

A well-planned move offshore for many people has the potential to instantly and permanently change their “category” …. for all intents and purposes. “C” category people can easily become “B” types. “B” types can easily convert to an “A” category. Even “A” types can double or triple their quality of life and still put money in the bank.  What a concept!

Your “category” was never set in concrete except if you decide it is so. A dramatic category “makeover” can be accomplished in as little as three months although one year or more is the typical planning/doing time .

I have personally witnessed many such changes for a number of North American couples since writing my eBook entitled “Panama Your Best Value for Offshore Living” Ebook1018 (click for a free copy).  This caterpillar to butterfly makeover was NEVER accomplished using tedious frugality or brilliant investment strategy … at least not of the normal sort.

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