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Diversify and Protect your Retirement Plan with Agricultural Real Estate in Paraguay

protect your pension

If you’ve recently watched any financial news, you’ll have been reminded of the volatility of the stock market and the potential of wild market swings.

stock market crashIn the final week of February 2020, the S&P 500 index dropped by more than 10% on global fears of the Coronavirus outbreak. This was the largest weekly drop since the 2008 financial crises during which the S&P 500 lost approximately 50% of its value.

Nevertheless, most U.S. investors seem to be happy to invest all their retirement funds and life savings in the stock market. And while the stock market may still be near all-time highs, you know it could collapse any moment … and if the worst happens and all your assets are stocks, your entire nest egg could go up in smoke.

Do you think having your entire retirement tied to any single asset class or financial system is a safe strategy?

Of course not, and that is why smart investors diversify and protect their retirement plan by investing in solid income-generating assets, such as agricultural real estate, instead of just paper-based stocks.

Why Invest in Agricultural Real Estate?

  • Returns on farm produce are not correlated with the financial markets, providing a great diversification opportunity against U.S. stocks.
  • Investments in agricultural real estate provide an excellent hedge against inflation.
  • Agriculture tends to be a secure and constantly rising market because of the continuous growing demand for food versus limited supply.

We offer investors proven turn-key agricultural investments that will diversify, internationalize and protect their retirement plans while increasing their savings.

diversify your IRA with agricultural real estateYou can own part of an orange plantation (starting from $18,500) or own a vegetable greenhouse (starting from $160,000) in Paraguay. These passive investment opportunities have the following benefits:

  • You own a hard, physical asset (your registered lot of land and/or greenhouse).
  • You receive an excellent ROI from the income generated from the crops grown on your land or in your greenhouse (projected annual ROI up to 32% for the orange plantation and up to 27% for the greenhouses).
  • You invest in a country, Paraguay, with a stable growing economy, and easy access to low-cost energy and labour.
  • Your produce is sold on the local market where most of the current demand is met by imports.
  • The main risks are mitigated and covered by insurance; the premiums are included in the purchase price.
  • Your investment is managed by a private German company with 25 years’ experience in Paraguay.

As a U.S. citizen, these are the 3 main methods to diversify and protect your IRA retirement plan with our agricultural real estate investments in Paraguay:

1. SDIRA with U.S. Custodian

save for retirementA self-directed IRA allows you to save for retirement on a tax-advantaged basis like any other IRAs. However, where regular IRAs typically house only stocks, bonds, mutual funds and other relatively common investments, self-directed IRAs offer many more investment possibilities, including our agricultural real estate investments.

Although the account is administered by a custodian or trustee, it’s directly managed by the account holder – i.e. the reason it’s called “self-directed”. In order to make the investment, you need to complete a form and send this to the custodian. Once they sign-off on the deal, your agricultural real estate investment is housed in your IRA. Your custodian also deals with any IRS requirements.

If you already have a Self-Directed IRA or a custodian, then you can work with them. Alternatively, we can introduce you to one who will set-up a new Self-Directed IRA for you.

While this method is the most economical, it gives less control over the investment and transfer of funds than the other methods.

2. SD Checkbook IRA Custodian with U.S. LLC and bank account

Another option is to purchase your agricultural investment through a U.S. LLC as part of a self-directed Checkbook IRA. I.e. this is a self-directed retirement account in which the holder establishes a private entity, typically an LLC, as the IRA-owned asset. This model allows you a higher degree of flexibility, because there’s no custodian involved. You control what to invest in (as long as the investment is passive) and your attached bank account handles the funding.

3. SDIRA with foreign LLC

protect your pensionThis method is similar to the first one with the added benefit of having a foreign LLC own your agricultural real estate investment. This adds an extra layer of protection against frivolous litigation or the U.S. government taking control of all or part of your retirement plan in the future.

There’re many jurisdictions under which you can set up a foreign LLC. Your IRA then invests in this LLC, which is a legal transaction, and you are the one managing the LLC (not your IRA custodian). Your IRA is simply a stockholder.

You can then use the LLC to purchase your agricultural real estate investment, which over time will create profits in your LLC, just like any other business.

Because the LLC is owned by your IRA, all your profits will be growing tax-free or tax-deferred. If the LLC was not held by an IRA, you would have a tax burden immediately when you receive dividends or sell the shares.

In addition, because your investment and retirement is held in a foreign company under foreign jurisdiction, it would be fairly difficult for litigators or the U.S. government to get hold of it, giving you this extra layer of retirement wealth protection.

Please click here to download the latest brochures of our agricultural real estate investments in Paraguay or contact us for more information about how to use these investments as part of your retirement plan.

The Agri Terra & Paraguay Ag Invest Team!