A lot of American retirees don't realize that they can currently use their 401k to finance their real estate purchase like a Mexico mortgage loan.
It's a perfect way to find Mexico financing for your dream retirement home in the sun south of the border.
Baby boomers that are moving to the sun are in a great position to benefit from this alternative to the Mexico mortgage option.
Not only does using a 401k provide a great tax shelter for future capital gains it also means retirees don’t have to reach into their pocket to take out any cash because those funds are already tied up.
Using your 401k like a Mexico mortgage is just a straightforward matter of moving funds from one qualified plan to another. There are no penalties from the government.
Yet, there is a threat to the Mexico mortgage substitute. The Investment Company Institute warned recently that federal initiatives will force investors to give up control over their 401k accounts.
The Institute said, "Households' views on policy changes revealed a preference to preserve retirement account features and flexibility".
According to a report by the Institute, seven in 10 U.S. households are against the idea of the government forcing retirees to put part of their savings into annuities to guarantee a steady income for life.
If this were to happen, it could mean retirees can no longer use the 401k to fund the purchase of Mexican vacation properties like a Mexico mortgage. The smart retiree won't be able to sit back when they retire, they will need to move fast before the rules change. If they change.
According to a Fidelity Investments report that looked at 11 million 401k accounts under its management, the average 401k fund balance dropped 31 percent to $47,500 at the end of March 2009 from $69,200 at the end of 2007.
Of course, retirees may still find advantages in the short and long term to using a traditional mortgage loans. For more information about financing for your Mexican property purchase, visit our information on how to find a Mexico mortgage.
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