Retirement Plan Blog



Your retirement plan is essential for happiness and success. It is also necessary to be flexible and to keep up to date.You will be affected by politics, economics, climate and a host of social parameters. It is vital to stay in touch and to be able to adapt effectively and quickly.

Ecuadorian Confirmation

It can now be confirmed that Mr Lenin Moreno defeated Mr Guillermo Lasso in the run-off election for the Presidency of Ecuador. Mr Moreno won with 51.16% of the votes. He was the vice-president in the out-going Presidency of Mr Correa, the latter being ineligible for re-election.

It is likely that the basic policies of the previous administration will not change greatly as was certain to be the case had Mr Lasso been successful. However, every new leader anywhere will want to put his own stamp on the country.

New laws with respect to entry to Ecuador were published prior to the election. Administrative regulations have not yet appeared.

There is continued easy access for tourists and other non-immigrant visitors. Provision is also still made for immigrant visitors to acquire residency. It does seem that some new procedures will be established. There will be a temporary residency which must be held for 21 months prior to application for permanent residency. There are more stringent restrictions with respect to absence from Ecuador during the temporary residency and early permanent residency. It seems also that there have been changes with respect to health insurance.

Until matters of practice become established it may be advisable for prospective retirees, for whom a particular immigrant visa is available, to check with local lawyers and/or the Ecuadorian Embassies in home countries. Some details may no longer suit all applicants and a re-assessment of plans may be necessary.

This site has provided links to information posted since the new laws have been promulgated on its "ECUADOR VISA FOR RETIREMENT" page. The information is in varying degrees of detail and most is not from official government sources. Those seeking details should beware of sites basing comments on conditions which were current prior to February 2017.

Nothing is a continuing or cast iron certainty so far as governments are concerned. Prospective retirees must keep in touch with changes to ensure that their financial security and personal needs can be satisfied on an on-going basis with adequate flexibility to take account of possible future changes.

Prudence, Protection and Preservation

The previous two blog posts described the risks to your wealth and from where it comes. This post reviews earlier strategies, which although no longer fully effective are still useful, more precisely identifies potential attacks and suggests alternative protective possibilities.

A few years ago it was necessary only to open an offshore bank account to achieve satisfactory capital security. An account with a bank in a jurisdiction other than that of normal residence or citizenship would usually put physical distance between funds and creditors. It would also establish legal barriers to the access of account details and to the funds. Accounts could be anonymous or numbered accounts making identification of ownership difficult. More complex financial structures, limited liability companies (shelf companies) and trusts, could be established with less than obvious beneficiaries. This has changed in the past few years.

Governments often assume that those with offshore bank accounts are, prima facie, tax evaders. Laws have been passed by many countries requiring overseas banks to report the holdings of their nationals and residents. The U.S.A leads in this kind of legislation with its Foreign Account Tax Compliance Act. Many countries are following this example. Banks are compelled to report on customers owing to draconian penalties imposed in the event of their failure to comply upon remittances made via the regulating country. So far as the U.S.A. is concerned the reporting requirements are extremely onerous. Banks now prefer not to have as customers anyone with connections to America. Accounts have been closed and new applications are denied. The law also applies to other financial institutions such as stock brokers.

It is almost impossible for American citizens and residents to open or maintain offshore accounts. However, as Rothschild suggested banks will not be cowed by governments. Some banks are opening new entities which do not do business in or with the U.S.A. They are not threatened by the penalties and can entertain accounts for those on whom they might otherwise be forced to report. Those requiring offshore facilities have simply been driven deeper underground. The government is frustrated and banks lose very little, if any, business.

Banks are still the principle enemy of wealth preservation. There is hope. Developing now are facilities which bypass banks for transfers and most other transactions. Crypto-currencies, of which there are now many, are increasingly accepted by businesses and can be dealt with via the internet directly between customers and enterprises. The best known such “currency” is “Bitcoin”. It has gained wide acceptance for transfers domestically and internationally. Neither bank nor government intervention is necessary.

Funds should be spread over a number of countries and banks practicing “fractional reserve banking”. Banks which do not lend depositors’ funds are safer but there are charges and always risks so far as any particular currency is concerned.

So, there are available anonymous facilities if needed. Banks should be used if and when necessary. It is important to stay in touch financially and politically. This website discusses all of these matters.

Unrestrained Banks : Above the Law

Having painted banks as the villains in the financial world, can the charge be sustained? An understanding of money and how it is created is necessary. In most countries commercial banks are the biggest creators of money. Banks create money out of thin air. Once a loan to a customer is approved a credit is made to the client’s account. This is done simply by a few taps on a computer keyboard. The borrower can immediately draw cash. Money has been created. The crucial misunderstanding is that credit, not the currency is, in fact, money, new money born of nothing.

Central banks create money for the government by similar wizardry. Central banks have special rights granted to them by governments. Often central banks are not parts of governments or they have a legislated independence. In the U.S.A. the Federal Reserve is a private organization. A government “orders” money, notes and coins, by issuing interest bearing financial instruments, “official I.O.U.s” to the central bank which then prints and mints the currency. The central bank alone has the right to trade the government’s I.O.U.s or treasury bonds to commercial banks (upon whom trading can be forced) and other parties.

It was once the case that commercial banks operated as intermediaries between depositors and borrowers. Banks were required to maintain a minimum percentage of depositors’ funds against the latter’s possible cash drawings. This was a bank’s government imposed statutory reserve. It was a principal limiting component of “fractional reserve banking”.

Thus national money supply was controlled. When, during the Reagan/Thatcher era, guidance of the economic principles of John Maynard Keynes were forsaken for those of Milton Friedman many controls were relaxed. Commercial banks could then lend beyond the extent of depositors’ funds.

Every deposit is a liability for a bank. Without regulation banks quickly became technically insolvent. Banks lent to borrowers who were financially unable to service the loans. Borrowers could take up such loans initially because of very low interest rates charged for the first few years.

Some banks saw a way to balance their books. Sets of mortgages, which were the majority of the low interest loans, were bundled and sold as financial derivates with the potential earning rate of the interest to be charged to mortgagees after the concessionary initial rate had expired. These sales netted a few banks vast amounts of money domestically and internationally. The likely eventual worthlessness of the sold items when mortgagees defaulted was known to the selling banks but this did not stop them trading these items even to other banks.

So many commercial banks traded while insolvent, a criminal offense, and fraudulently sold items knowing their likely worthlessness. Their actions precipitated the 2008 Global Financial Crisis which is still inhibiting the health of the world’s economies. This is why the answer to the question posed in the first sentence above is emphatically “YES”.

For confirming argument read "The Production of Money: How to Break the Power of Bankers", by Ann Pettifor, Verso, London, 2017.

How Your Money Goes

Knowing your enemy is said to be the secret of victory. This not only true militarily but also financially. For the hunted staying at least on step ahead of pursuers assures freedom. The inactive exercise of vigilance is necessary but not sufficient for safety and protection. For retirees financial security is vital. From any loss of wealth, those no longer earning an income will have difficulty in recovering. None of this is new. In 1790 Rothschild said: "Let me issue and control a nation's money and I care not who writes the laws." This simple statement identifies for everyone their principle antagonist in the fight to preserve wealth.

Thieves, beggars, creditors, relatives, friends and many others met in the course of an ordinary lifetime will be experienced as they all trying to acquire riches from those known or unknown to them although the former have no right to possess such wealth. Rothschild was a banker and his famous statement clearly identifies the wolf in sheep’s clothing, the fifth columnist who is the enemy of those wishing simply to retain and enjoy the fruits of their own labour when they have accumulated enough to support themselves for the rest of their life.

Banks operate stealthily. They attract supporters, their natural prey, by offering small rewards by way of interest on deposits. Then they lend this money to others. Their myriad of small, often unidentifiable, though justified by all their kind, charges erode their customers means of support until the fleeced have nothing more to give. Blame for their depredations is usually laid at the feet of others, principally governments. The latter accept such responsibility in the belief that their own raison d’être is assured by their “friends”, the bankers.

Eventually, when it is too late, the politicians, who form the government in most countries, find that their country is bankrupt and that the bankers, the banks’ owners and directors, have hived off their gains outside the country. The government is left with an empty ruin of debt and that for some sort of survival the country must rob its own citizens. Pessimistic? Ask the people of Ireland, Cyprus, Greece or Zimbabwe. Remember the Great Depression of 1929 – 1940, disastrously terminated, but not solved for most, by the Second World War, recall Germany’s Weimar Republic, never forget the plundering of private citizens’ gold by the U.S.A. government in 1933.

So, having identified the threat to personal wealth is it possible to thwart it? In any market nothing is certain. What is sure is that, for survival, doing nothing is not an option. Your well-being before and after retirement depends upon you being in touch with current political trends and knowing of available protective strategies. All comments and suggestions are made with a view to preserving the safety of an individual’s wealth. There is no attempt here to solve national macroeconomic problems.

For ideas, guidance and choices see the next couple of posts in this blog and other pages on this website.

Outcome Uncertain in Ecuador

There seems to be some uncertainty with respect to the outcome of the Ecuadorean presidential election. This seems to be following the trend of countries such as the U.S.A. and Australia. President Trump was not expected to win according to most forecasts even on election day. In Australia, the incumbent government of Mr Turnbull had to wait many days to have a one-seat majority confirmed. Even so, this was a pyrrhic victory owing to the fact that the government's situation in the upper house, the Senate, deteriorated.

The situation in Ecuador is likely to be more volatile than in the U.S.A. and Australia even though there were and continue to be large public demonstrations against President Trump both domestically and abroad. It must be emphasised that no political situation can ever be taken as stable, certainly not set in concrete.

The policies of the right-wing presidential contender, Mr Lasso, differ markedly from those of the left-wing previous president Mr Correa and his protégé Mr Moreno. Changes in laws and regulations may be expected if the former candidate ultimately wins office.

Resident retirees should have taken more than a passing interest in the election even though most would not have been eligible to vote. They should have built into their residency as much flexibility as possible particularly with regard to their finances, both capital and income. If possible they should have an alternative country to which they can go if that becomes necessary.

Potential retirees to Ecuador would do well to wait until the situation is resolved and any changes become clear. A re-assessment of needs may be necessary and a change of target country may be best. Flexibility, alternatives, strategy revision, substitutes, timing changes and adaptive speed must all be watchwords in dealing with governments, financial institutions and income possibilities.

This website has many pages relevant to specific countries, banks, income, tax, health and other less vital considerations such as, climate, social situations and time zones that retirees should take into consideration. It is unlikely that any one country will prove to be ideal for all purposes. Being willing to make compromises should enable changes to be made after resettlement or prior to confirming arrangements although this is rarely easy. Never get “locked in” to a changed and deteriorating situation which will lead especially to major financial losses. Remember also that your country of origin may not be able or willing to provide assistance to you.

QROPS Cropped

The latest British Budget (March 2017) has imposed a 25% charge on some transfers to QROPS (Qualifying Recognised Overseas Pension Schemes) for those retiring abroad. Not all will be adversely affected.

The measure is aimed at those who seek to reduce tax payable by moving their pension to another jurisdiction. Those who have a real need to transfer their pension to the same jurisdiction as that to which they intend to retire will, generally, not be penalised. This favourable treatment would apply particularly when the person and the pension are both located within the EU area.

There are up to 20,000 transfers to QROPS annually but the government suggests that only a minority of such moves would attract the charge. An example of the imposition of the charge would be upon a person retiring to Portugal or Spain or other EU country but who seeks to transfer to a QROPS based in the Channel Islands.

It is also possible for a person over the age of 55 years to take their whole pension in cash and transfer it to wherever they desire (assuming the legality of such a transfer to any particular country).

This is just another example of the need to keep abreast of political changes. Nothing that is legislated for by any government can ever be assumed to be a permanent arrangement.

Ecuadorean Alterations

The government of Ecuador has just promulgated a new set of laws governing entry to that country. These laws cover all kinds of entry for all purposes. The New Mobility Law or “Ley de Movilidad Humana” is in effect now. However, the accompanying and necessary regulations which govern the administration of the law have not yet been published. All current applications for visas have been suspended until the Ministry has determined the exact requirements for each type of visa.

The new law repeals all previous legislation dealing with entry to the country and consolidates the legal framework for entry to Ecuador for transients, tourists, residents, and applications for naturalisation. The situation with respect to applications “in progress” is unclear.

Retirees considering a move to Ecuador will have to re-assess their needs. It may be that the minimum requirements of desired personal freedom may no longer be available in Ecuador or that the new two-stage process for permanent residency is too onerous or unsuitable. Eventually, it will be necessary to investigate how this new law and any others relating to different details of life in Ecuador or movement to that country varies the rights of new immigrants, specifically retirees, so far as earning capacity and capital movements are concerned.

The new law sets out some twelve categories (including retirement) specifying who can apply for the new “temporary residency". This temporary stage is now necessary before an application for permanent residency can be made. The temporary visa must be held for 21 months and holders may not be absent from the country for more than 90 days each year. This period increases to 180 days each year for permanent residents for the first two years of residency. After this period it is possible to be absent for up to 5 years.

After 3 years as a permanent resident is it possible to apply for naturalisation. No period of absence from the country prior to applying for citizenship is now specified.

It is unlikely that the required documentation to support any application will change substantially. It must be anticipated that other changes will occur as the new regulations are instituted to enforce the new law. This may well include a limit on the number of countries whose citizens can enter the country but there has been no suggestion as yet that this will happen even though it is what the U.S.A. wants to enforce.

These changes to Ecuadorean law reinforces the fact that all retirees must look carefully at the personal freedoms that may need to be relinquished, even temporarily, to settle in a new country. The care required in making financial arrangements is emphasised by these changes. Where governments are concerned nothing is set in concrete. It is up to individuals to protect themselves physically and financially and this is especially vital for retirees. There is usually little time for a retiree to recover once adverse circumstances have occurred.

The End is Near?

Having achieved success in negotiations with FARC the Colombian government is now hoping for a similar outcome with the ELN. This is a much much smaller group than FARC but it has, arguably, more political than military strength. In “raw numbers” the ELN had about 3000 members compared with over 7000 in the FARC group. The current strength of combatants in the ELN is estimated at 1500. It has a presence in urban areas rather than just the outlying regions. Its emphasis in influencing the various governments over the past fifty or so years has been to attack infrastructure rather than people although this is not to say that it has not made targets of the general population. Like FARC it has been financed by drug dealing and kidnapping for ransom.

The talks now beginning in Ecuador have been prompted by the release of a former parliamentarian, a pre-condition for talks set by the government. The mood of the ELN seems more conciliatory than has been the case previously. This new effort towards an agreement by the ELN may well have been influenced by the successful conclusion of the FARC negotiations. There have been previous attempts at a settlement between the government of Colombia and the ELN so there is a history of contact for a conclusion of hostilities. A previous offer by the government of autonomous rule over a portion of the country is unlikely to be repeated if only because such an arrangement was not necessary to achieve a successful outcome with FARC. However, the discussions between the government and the ELN are not likely to be easy if only because the latter group is politically and sociologically more sophisticated than FARC.

Both FARC and the ELN have their roots in the political left. There are fine differences in philosophy between them. The former is of a Marxist-Leninist persuasion. The ELN has Marxist roots but also a Christian-leaning. It was led by a series of Roman Catholic priests in the 1960s and 1970s who favoured “liberation theology”.

There has been sporadic contact between the government and the ELN since 2004. The current peace effort has begun in Ecuador with Brazil, Chile, Cuba, Norway and Venezuela acting as guarantors. Both sides have made concessions to enable the talks to start. The release of an important hostage, mentioned above, by the ELN and the Government’s acknowledgement of the status of two senior ELN members as negotiators and likely future politicians rather than as fugitives have been acts that have encouraged the beginning of the new negotiations.

There is every prospect of success if only because the current President of Colombia, Juan Manuel Santos, has only two years remaining in his term of office and he would like to secure his legacy as a national peacemaker and precursor of Colombia’s emergence as a rapidly developing part of the Third Word. Two years for achieving a deal is ambitious given the time it took to settle with FARC.

Colombian Time is Here

With the coming of peace, Colombia can look forward to progress and appreciation. Economic progress is to be expected and appreciation will come not just financially but from its increasing appeal to retirees. Colombia has it all. Climate, low cost of living, good affordable healthcare, modern services, and unbelievable property value.

Medellin, the city of eternal spring, is still currently the retirees’ place of choice. With the final peace deal with FARC accomplished many more towns and cities will be found by retirees and tourists alike. Often the latter translate to the former. Although Medellin is still a top choice half a dozen other centres are as attractive historically and scenically and the very friendly Colombian people grace each one. There is access to both the Caribbean and Pacific coasts.

Shops, supermarkets and malls stock almost all of the things a U.S. citizen would want. Telephone and internet services are good and broadly available. The Health service is excellent and is rated by W.H.O. as better than America and in the top 25 services in the world. The expertise is complemented by the price, which is extraordinarily low, and the immediacy and universality of availability to newcomers are outstanding.

Having a comfortable place to live is important especially for retirees. In Colombia the very advantageous exchange rate of the peso with the U.S. dollar makes house or apartment purchase very cheap. This also makes real estate a great investment.

For accessibility, Colombia is one of the best places in South America. It is only three hours flying time from Florida. While on the subject of transport it is worth mentioning that a car is hardly necessary. Public transport and private services are plentiful and cost so little that personal vehicles are virtually unnecessary.

All of this will change. As more and more retirees, tourists and investors discover Colombia overall prices can only rise. The first to come will benefit the most. If you are planning your retirement now, and you should be, put Colombia on your list of possibilities. You can see more details of the country on this site and in the book specifically about the country available from here.

Yours, Personally

Protection : Benefits : Privacy : Expatriation

The new year has begun. Are you planning for your retirement? You should be. Here are some points to consider for your future.

Personal Protection

A second passport or citizenship might save your life and freedom in times of political unrest, civil strife, or other violent and uncontrolled situations. It is a good insurance.It can act as a protective shield.It can include a spouse and children.Existing nationality is usually preserved. Dual nationality is accepted by most countries. Most countries do not regard having a second passport as illegal. It should not be viewed as suspicious or indicative of, for example, tax evasion.

Financial Benefits

A second citizenship/passport can reduce taxes and protect assets. It allows enhanced financial privacy, better earnings in some markets, greater diversification of investments and currencies, improved monetary and property safety and security, The restrictions placed on U.S. citizens by foreign banks and other financial institutions can be avoided via a second passport. Offshore bank accounts are then available and via such accounts a host of other investments.

More Privacy

A second passport protects identity and against identity theft and against discrimination.It avoids unwanted endorsements in a passport that must be or is best kept “clean”.It allows access to countries that may not welcome certain passports/citizens.Privacy at home and abroad is facilitated.

Expatriation

Renouncing the citizenship of any country is only possible if a second passport has been obtained.Some countries do not recognize expatriation. A Greek citizen by birth is always Greek in the eyes of that country’s government even if the original passport has been allowed to expire. China automatically cancels the passport of a citizen who acquires another passport as soon as that fact is known.Expatriation can legally eliminate most tax impositions by the taxing country. Visitors to a country pay indirect taxes but not regular and recurrent income taxes.


You can buy books by Les on specific countries for Kindle or for other readers at the retailers mentioned below.

You can also buy a Kindle device from Amazon for reading the e-books that you purchase.

Just click below where appropriate.


Malaysia

The Philippines

Panama

Colombia

Dominican Republic

Uruguay

Dominica

Ecuador

Belize

Australia

New Zealand

Canada

Retirement Abroad - Your Complete Resource

A Short English Grammar

Your World




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