How to Use IRA or 401(k) for Portugal Golden Visa [2026 Guide]

Key Takeaways

• Yes, you can use SDIRA or Solo 401(k) for Portugal Golden Visa — but it operates in a legal gray area with no direct IRS guidance
• Major risk: IRS could classify the residency benefit as a "prohibited transaction" — entire IRA disqualified, full income tax plus 10% early withdrawal penalty
• Minimum investment: €500,000 in qualifying Portuguese funds (real estate eliminated since October 2023)
• Minimal presence required: Only 14 days per 2-year period; citizenship possible after 5 years (though proposed legislation may extend to 10 years)
• Complex US tax reporting: FBAR, Form 8938, potential UBIT (Unrelated Business Income Tax) if fund uses leverage

Important: This strategy exists in a legal gray area. The IRS has issued no guidance on whether using retirement funds for Golden Visa investments constitutes a prohibited transaction. We explain the risks honestly below — most guides either oversell the opportunity or ignore the compliance concerns entirely. Proceed with qualified legal counsel.

IRA/401(k) Golden Visa: By the Numbers

Based on MovingTo's experience processing 2,500+ Golden Visa applications (98% approval rate) and our work with US-based retirement account investors:

• Estimated US IRA/401k investors in Portugal Golden Visa: 200-400 as of 2025 (a small but growing segment of ~12,000 total Golden Visa holders)
• Average setup time (SDIRA to fund investment): 3-4 months
• Average total processing time (start to Golden Visa approval): 8-14 months
• Most common investment amount: €500,000-€600,000 (fund route minimum + buffer for fees)
• Checkbook IRA vs standard SDIRA split: ~60% Checkbook IRA, 40% standard SDIRA (Checkbook preferred for faster transactions)
• Most popular SDIRA custodians used: Equity Trust, Millennium Trust, Alto IRA
• Average fund management fees: 1.8%-2.2% annually across qualifying funds
• IRS audit rate for foreign IRA investments: Reportedly higher than domestic investments — proper compliance is critical

Key insight: US retirement account investors represent less than 5% of Portugal Golden Visa applicants, but the segment is growing as Americans seek tax-efficient paths to EU residency without liquidating retirement savings.

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Who Should Consider This Strategy

This strategy suits a specific investor profile. Review both lists before proceeding.

Good Fit

• $500,000+ in existing IRA or 401(k) funds
• Want EU residency without liquidating retirement savings
• Comfortable with complex cross-border tax structures
• Have access to qualified SDIRA custodians and tax attorneys
• Accept that this is a gray area with real compliance risk

Don't have €500k in retirement funds? Consider the D7 visa instead.

Not a Fit

• Need a guaranteed, IRS-approved investment path
• Can't afford potential IRA disqualification (could lose 45%+ to taxes/penalties)
• Want to avoid ongoing US reporting (FBAR (Foreign Bank Account Report, FinCEN Form 114), Form 8938, UBIT)
• Looking for simple, hands-off retirement investing
• Primary goal is tax avoidance rather than genuine residency

Quick Decision Rule

1. Do you have $500k+ in retirement funds? If no → explore other visa routes
2. Can you tolerate the gray area risk? If no → use personal (non-retirement) funds instead
3. Will you hire qualified cross-border counsel? If no → don't proceed

Can you use your IRA or 401(k) to invest in Portugal's Golden Visa? Yes, through a Self-Directed IRA (SDIRA) or Solo 401(k)—but this strategy operates in a legal gray area with no direct IRS guidance. This guide explains exactly how it works, the tax implications, and the compliance risks you need to understand before proceeding.

Using retirement funds for the Golden Visa lets you:

• Avoid early withdrawal penalties (funds stay in the retirement account)
• Maintain tax-deferred or tax-free growth
• Qualify for EU residency while preserving retirement savings

But there's a catch: the IRS hasn't ruled on whether Golden Visa investments constitute a "prohibited transaction" under retirement account rules. We'll cover that risk—and how to mitigate it—below.

What Is the Portugal Golden Visa? (2026 Requirements)

Portugal's Golden Visa grants residency to non-EU investors who make qualifying investments. After five years, you can apply for permanent residency or citizenship—without living in Portugal full-time.

Current Investment Options (2026)

Route	Minimum Investment	Notes
Investment Funds	€500,000	Must invest 60%+ in Portuguese companies. Most common route.
Business Investment	€500,000	Create or support companies with 5+ jobs.
Cultural/Heritage	€250,000–€500,000	Arts, culture, or national heritage projects.
Research & Development	€500,000	Scientific research at approved institutions.
Real Estate	Eliminated	Removed by Law 56/2023 (effective Oct 2023).

Key Benefits: - Only 14 days per 2-year period physical presence required (many sources cite 7 days/year as safe minimum) - Includes spouse, dependent children, and dependent parents - Path to Portuguese (EU citizenship) after 5 years - Visa-free travel to 188+ countries with Portuguese passport

⚠️ Citizenship Timeline Risk: Portugal is considering legislation to extend the citizenship waiting period from 5 to 10 years. Not yet passed as of February 2026, but monitor for updates. Due to processing delays (~3 years for approval), the practical timeline to citizenship is already 8-10 years in many cases.

How Self-Directed IRAs Enable Foreign Investment

A Self-Directed IRA (SDIRA) is a type of individual retirement account held by a specialized custodian that permits investments in alternative assets including foreign investment funds, real estate, and private equity. Unlike traditional IRAs at Fidelity or Vanguard, SDIRAs allow you to invest retirement funds in Portugal Golden Visa qualifying funds.

A Self-Directed IRA (SDIRA) is a retirement account that allows investments beyond stocks, bonds, and mutual funds. Unlike regular IRAs held at Fidelity or Schwab, SDIRAs can invest in:

• Real estate (foreign and domestic)
• Private equity and venture capital
• Precious metals
• Foreign investment funds—including Portugal Golden Visa funds

How It Works

1. You open an SDIRA with a specialized custodian (not a regular brokerage)
2. Transfer or rollover funds from an existing IRA or 401(k)
3. The SDIRA invests in a qualifying Portuguese fund
4. The fund holds the investment—you maintain your Golden Visa eligibility
5. Growth stays tax-advantaged (deferred for Traditional, tax-free for Roth)

The SDIRA—not you personally—owns the investment. This is critical for maintaining tax-advantaged status.

Checkbook Control IRA/LLC

For faster transactions without custodian approval delays, some investors use a Checkbook IRA structure:

1. SDIRA forms a US LLC
2. You become the manager of that LLC
3. The LLC opens a US bank account
4. LLC then creates a Portuguese company (Lda) or invests directly in funds

This structure provides "checkbook control"—you can write checks from the LLC account without waiting for custodian approval on each transaction.

Bottom line: SDIRAs are the bridge that lets US retirement funds flow into Portuguese investment funds — but you need a specialized custodian, not Fidelity or Schwab.

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Solo 401(k) vs Self-Directed IRA: Which Is Better?

Both can fund Golden Visa investments. Here's how they compare:

Feature	Self-Directed IRA	Solo 401(k)
Eligibility	Anyone with earned income	Self-employed/business owners only (no full-time employees except spouse)
2026 Contribution Limits	$7,500 ($8,600 if 50+)	Up to $72,000 ($79,500 if 50-59 or 64+; $83,250 if 60-63)
Checkbook Control	Requires IRA/LLC setup	Often built-in
Loan Provision	Not allowed	Up to $50,000 or 50% of balance
Custodian Required	Yes	Yes, but simpler structure
Roth Option	Yes (Roth IRA)	Yes (Roth Solo 401k)
Best For	Most investors	Self-employed with high income to shelter

Example: A 55-year-old self-employed consultant earning $200,000 could contribute up to $79,500 annually to a Solo 401(k) ($72,000 base + $7,500 catch-up; or $83,250 if ages 60-63 under SECURE 2.0). With an SDIRA, the same person is capped at $8,000. Over 5 years, the Solo 401(k) allows $397,500+ in contributions vs. $43,000 for the SDIRA.

Bottom line: If you're self-employed and want to maximize contributions, Solo 401(k) offers much higher limits. If you're a W-2 employee or want simpler setup, SDIRA works fine.

Step-by-Step: Using Retirement Funds for Golden Visa

Step 1: Establish Your Retirement Account

Choose a specialized SDIRA custodian or Solo 401(k) provider that allows foreign investments. Not all do.

Reputable SDIRA custodians for alternative investments:

• Equity Trust Company
• Millennium Trust
• Entrust Group
• IRA Financial (for checkbook control)

What to verify: The custodian must allow foreign fund investments and have experience with Portuguese structures.

Step 2: Set Up Checkbook Control (Optional but Recommended)

For a Checkbook IRA/LLC structure:

1. Form a US LLC (typically in Wyoming or Delaware)
2. Your SDIRA becomes the sole member of the LLC
3. You become the LLC manager
4. Open a US bank account for the LLC

This gives you signing authority without waiting for custodian approval on each transaction.

Step 3: Fund the Account

Transfer or rollover funds from your existing retirement accounts:

• Direct rollover from 401(k) to SDIRA (no tax consequences)
• Trustee-to-trustee transfer between IRAs (no tax consequences)
• Indirect rollover (60-day rule applies—riskier, avoid if possible)

Minimum needed: €500,000 (~$540,000 USD at current rates) plus buffer for fees.

Total cost estimate: €500,000 investment + ~€5,000–€10,000 legal/application fees + ~€2,000–€5,000 annual fund management fees + ~$3,000–$5,000 SDIRA custodian setup and annual fees. Budget approximately $560,000–$580,000 all-in for the first year. Use our Golden Visa Cost Calculator to estimate your total investment, or see our complete cost breakdown for detailed fee analysis.

Step 4: Open a Portuguese Bank Account

Your US LLC (or Portuguese Lda, if created) will need a Portuguese bank account to receive fund investments or make local payments.

Requirements:

• LLC formation documents (apostilled)
• US bank statements
• Proof of source of funds
• FATCA compliance documentation

Note: Many Portuguese banks are wary of US persons due to FATCA (Foreign Account Tax Compliance Act) reporting burdens. Work with banks experienced in US investor accounts—your fund manager or immigration lawyer can recommend options.

Step 5: Subscribe to a Qualifying €500k+ Fund

Your SDIRA (via the LLC) invests in a Portuguese Private Equity or Venture Capital Fund that qualifies for Golden Visa.

Fund requirements:

• Registered with CMVM (Portugal's securities regulator)
• Invests at least 60% in Portuguese companies
• 5-year minimum commitment typical

Popular fund sectors: technology, real estate development, renewable energy, tourism.

Due diligence: Review fund performance, fee structure (management + carried interest), portfolio composition, and fund manager track record.

Step 6: Submit Golden Visa Application

Once the investment is confirmed, apply through AIMA (Agência para a Integração, Migrações e Asilo, Portugal's immigration authority):

• Proof of investment (subscription agreement, bank transfers)
• Clean criminal record
• Valid passport
• Health insurance
• Proof of accommodation (rental or hotel for initial stay)

Processing: 6–12 months typical via AIMA (Portugal's immigration authority). Biometrics appointment required in Portugal.

Step 7: Maintain Compliance (US + Portugal)

Ongoing requirements: - Maintain €500k investment for 5 years minimum - Spend 7 days/year in Portugal (can be consecutive) - Renew Golden Visa every 2 years - File required US tax forms annually (see below)

Bottom line: The process takes 3-6 months from SDIRA setup to Golden Visa application. Start with custodian selection — everything else follows.

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Critical Tax Implications

This is where most guides get it wrong. Using retirement funds for Golden Visa has complex tax implications that require professional guidance.

US Tax Treatment While in the IRA

While funds remain in your SDIRA or Solo 401(k):

• Traditional IRA/401k: Gains are tax-deferred. You pay income tax on withdrawals in retirement.
• Roth IRA/401k: Gains are tax-free. Qualified withdrawals are tax-free.

The investment's growth stays tax-advantaged as long as funds remain in the account structure.

UBIT/UDFI Warning

IRAs are generally tax-exempt, but certain investments trigger Unrelated Business Income Tax (UBIT) — a tax on income earned by tax-exempt entities from activities unrelated to their exempt purpose:

Trigger	What Happens
Debt-financed income (UDFI)	UDFI (Unrelated Debt-Financed Income) applies when funds borrow money to invest. If your Portuguese fund uses leverage (common in PE/VC), a portion of returns is taxable at trust rates up to 37%.
Active business income	If the fund generates operating income (not just capital gains), UBIT may apply

Example: Your €500,000 fund investment earns 8% ($43,200) in a year. The fund uses 50% leverage. Roughly half your return ($21,600) may be classified as UDFI. At 37% trust tax rate, you'd owe ~$8,000 in UBIT — eroding your tax-advantaged returns.

Action: Ask your fund manager about leverage ratios before investing. If UBIT exceeds $1,000/year, file IRS Form 990-T.

Portugal Tax Residency: What Happens When You Move

If you become a Portuguese tax resident (183+ days/year or primary residence in Portugal):

NHR Abolished: Portugal's Non-Habitual Resident (NHR) tax program ended for new applicants on January 1, 2024. The replacement—IFICI—has stricter eligibility (primarily R&D and startups). Most Golden Visa investors will not qualify.

Roth IRA Trap: Portugal does not recognize Roth IRA tax-free status. If you're a Portuguese tax resident and withdraw from a Roth:

• Contributions (cost basis): Exempt as return of capital
• Growth/earnings: Taxed as foreign pension income at progressive rates up to 47%
• Without NHR/IFICI benefits, the growth portion faces full Portuguese income tax

Example: If you contributed $100,000 and withdraw $150,000, only the $50,000 gain is taxable in Portugal—but at rates up to 47%.

This is a major planning consideration. Consult a cross-border tax advisor before taking Roth distributions while living in Portugal.

US-Portugal Tax Treaty

The treaty helps prevent double taxation—but the "saving clause" means the US retains the right to tax its citizens and residents on worldwide income regardless of the treaty.

What this means: You can't avoid US tax obligations by moving to Portugal. You must:

• File US tax returns (Form 1040) annually
• Claim Foreign Tax Credit (FTC) or Foreign Earned Income Exclusion (FEIE) to offset double taxation
• Report foreign accounts and assets (see below)

Bottom line: Your investment grows tax-deferred, but you cannot access Golden Visa benefits using IRA funds until age 59½ without triggering penalties.

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Compliance Risks You Must Understand ⚠️

This is the section most articles skip—but it's the most important.

Prohibited Transaction Concerns

The IRS prohibits retirement account assets from being used "for the benefit of" the account owner under IRC §4975.

The problem: A Golden Visa investment provides you with residency rights—a direct personal benefit.

The reality: - No IRS Revenue Ruling specifically addresses Golden Visa investments via SDIRA - No Tax Court cases on this issue - This strategy exists in a legal gray area

This doesn't mean it's illegal—but it means there's no safe harbor protection if the IRS decides to challenge it.

Consequences of Disqualification

If the IRS determines a prohibited transaction occurred:

1. Entire IRA is disqualified (not just the Golden Visa portion)
2. All assets treated as distributed on January 1 of that tax year
3. Full income tax on the entire account balance
4. 10% early withdrawal penalty if under age 59½

Example: You have a $500,000 SDIRA invested in a Portuguese fund. The IRS determines it's a prohibited transaction. Result: The entire $500,000 is treated as distributed on January 1. At a 35% marginal rate plus 10% early withdrawal penalty, you owe $225,000 in taxes and penalties — nearly half your retirement savings gone overnight.

How to Mitigate Risk

1. Document everything meticulously—investment purpose, decision process, arm's-length nature
2. Work with a cross-border tax attorney experienced in both SDIRA compliance and Portuguese investment structures
3. Consider the investment on its merits—ensure you would make this investment regardless of residency benefits
4. Maintain separation—all transactions at arm's length, proper custodian approvals
5. Get a tax opinion letter from qualified counsel (expensive but provides some protection)

Bottom line: The IRS scrutinizes foreign IRA investments heavily. One prohibited transaction can disqualify your entire IRA. Use experienced legal counsel.

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US Reporting Requirements

US investors using retirement funds for foreign investments must comply with multiple reporting obligations:

FBAR (FinCEN 114)

If you have signatory authority over foreign accounts exceeding $10,000 at any point during the year (FinCEN requirements):

• File FinCEN Form 114 (FBAR) by April 15 (extension to October available)
• This includes your Portuguese bank account and potentially the underlying fund accounts
• Penalties for non-filing: up to $16,536/violation (non-willful, 2025 figure) or 50% of account balance (willful)

Form 8938 (FATCA)

If foreign financial assets exceed thresholds ($50,000–$600,000 depending on filing status and residency):

• File Form 8938 with your tax return
• Report the Portuguese fund investment and any foreign accounts

Form 8621 (PFIC (Passive Foreign Investment Company))

Portuguese investment funds are typically classified as Passive Foreign Investment Companies (PFICs) — a US tax category for foreign funds that earn mostly passive income (dividends, interest, capital gains). PFICs normally face punitive US tax treatment, but IRAs get an exemption.

Important: Investments held within an IRA are generally exempt from PFIC reporting under Treasury Regulations. However:

• Verify your specific fund structure with a tax advisor
• If you hold fund interests outside the IRA, Form 8621 applies
• Non-compliance penalties include extended audit periods and interest

Forms 5471/8865 (If Applicable)

If your LLC creates a Portuguese subsidiary (Lda) or you have significant ownership in foreign entities:

• Form 5471: Controlled Foreign Corporation reporting
• Form 8865: Foreign partnership reporting

These have extensive disclosure requirements and significant penalties for non-filing.

Bottom line: Expect to file FBAR, Form 8938, and potentially Form 8621 annually. Budget $500-$1,500/year for a CPA who understands foreign retirement investments.

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Total Cost Breakdown: Fees to Expect

Beyond the €500,000 minimum investment, budget for these ongoing costs:

SDIRA Custodian Fees

• Annual account fee: $300-$500/year (some charge based on account value)
• Transaction fees: $50-$100 per investment transaction
• Wire transfer fees: $25-$50 per international wire
• Asset holding fees: Some custodians charge 0.1%-0.5% of alternative asset value annually

Typical total: $500-$1,500/year depending on custodian and activity level.

Golden Visa Fund Management Fees

• Management fee: 1.5%-2.5% of invested capital annually
• Performance fee: 10%-20% of profits above hurdle rate (varies by fund)
• Subscription fee: 0%-3% one-time at entry (some funds waive this)
• Exit fee: Usually 0% after mandatory 5-year hold period

Example on €500,000: At 2% management fee = €10,000/year (~$10,800 USD).

Other Costs

• Tax attorney setup: $2,000-$5,000 (one-time, for SDIRA/Checkbook IRA structure)
• Annual tax filings (FBAR, Form 8938): $500-$1,500/year if using a CPA
• Golden Visa government fees: ~€5,000-€7,000 per applicant (separate from investment)

Budget total for Year 1: $15,000-$25,000 in fees beyond the fund investment itself.

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Frequently Asked Questions

Can I use my retirement savings for a European visa?

Yes. US retirement accounts (IRA, 401k, Roth IRA) can be used for European residency-by-investment programs like Portugal's Golden Visa. You need a Self-Directed IRA (SDIRA) or Solo 401(k) — regular brokerage accounts at Fidelity or Vanguard won't allow foreign fund investments. The minimum investment for Portugal is €500,000 in a qualifying fund.

Is it legal to invest my 401k in Portugal?

Yes, it's legal — but it requires careful structuring. You must roll your 401(k) into a Self-Directed IRA or Solo 401(k) that permits foreign investments. The investment itself must comply with IRS prohibited transaction rules (IRC §4975), and you'll have additional reporting requirements (FBAR, Form 8938). Work with a tax attorney experienced in international retirement investments.

What's the cheapest way to get EU residency from the US?

For investment-based residency, Portugal's Golden Visa fund route at €500,000 (~$540,000) is among the most accessible. Italy offers a lower €250,000 option but only for innovative startups. For non-investment routes, Italy's Digital Nomad Visa requires just €28,000/year income. Using retirement funds (IRA/401k) lets you access EU residency without liquidating taxable savings — the investment grows tax-deferred while you gain residency rights.

Can I live in Portugal using my IRA investment?

Yes and no. The Golden Visa grants you residency rights in Portugal and Schengen Area travel. However, you cannot personally benefit from the IRA investment (withdrawals, distributions) until age 59½ without triggering taxes and penalties. You can live in Portugal, but your living expenses must come from non-IRA sources until retirement age.

Can I use a traditional IRA for Portugal Golden Visa?

Yes. Transfer your traditional IRA to a Self-Directed IRA with a custodian that allows foreign investments, then invest in a qualifying Portuguese fund. Tax treatment remains the same—gains are deferred until withdrawal.

What happens if my investment fund loses value?

Temporary fluctuations don't jeopardize your Golden Visa, as long as you maintain the minimum capital invested. However, if the fund falls below €500,000 in value, verify with your immigration lawyer whether this affects your status. Generally, it's the initial investment amount that counts, not current market value.

Can I include family members in my Golden Visa application?

Yes. Your spouse, dependent children (including adult children who are students or financially dependent), and dependent parents can be included as "family reunification" under your Golden Visa—regardless of whether the investment comes from retirement funds.

Do I need to live in Portugal to keep my Golden Visa?

No. Portugal requires only 14 days per 2-year renewal period (after the first year). Many advisors recommend 7 days per year as a safe minimum. You can live wherever you want and visit Portugal for brief stays to maintain status.

What are the exit options after 5 years?

After maintaining your Golden Visa for 5 years, you can:

• Apply for permanent residency (requires basic Portuguese language test)
• Apply for Portuguese citizenship (requires A2 Portuguese level and clean record)
• Exit the investment entirely once citizenship is granted
• Maintain the investment for continued returns

Citizenship is permanent—you don't lose it by leaving Portugal or selling the investment afterward.

Note: Portugal is considering extending the citizenship wait from 5 to 10 years. Not yet law as of February 2026, but factor this into planning. Also, AIMA processing backlogs mean practical timelines often stretch to 8-10 years regardless.

Can I still contribute to my IRA after investing in Golden Visa?

Yes. Your IRA contribution limits are unchanged. You can continue contributing up to the annual limit ($7,500/$8,600 for 2026) regardless of how existing funds are invested.

What if the IRS challenges my investment as a prohibited transaction?

This is the key risk. Document your investment rationale thoroughly, maintain arm's-length transactions, and work with qualified legal counsel. Consider obtaining a tax opinion letter. The investment should be defensible on its own merits—not solely as a visa strategy.

Next Steps

Using IRA or 401(k) funds for Portugal's Golden Visa is possible—but it requires careful planning, proper structures, and ongoing compliance.

Before you proceed:

1. Consult a cross-border tax attorney familiar with SDIRA rules AND Portuguese investment structures (see our Golden Visa law firm guide)
2. Verify custodian capabilities—not all SDIRA providers allow foreign fund investments
3. Conduct fund due diligence—fees, performance, portfolio, manager track record
4. Understand the gray area—no IRS safe harbor exists for this strategy
5. Plan for Portuguese tax residency—if you intend to actually live there

Sources

Portuguese Immigration & Golden Visa: - AIMA (Agência para a Integração, Migrações e Asilo) — Official Portuguese immigration authority - Lei n.º 56/2023 — Portuguese law eliminating real estate from Golden Visa (effective October 7, 2023) - CMVM (Comissão do Mercado de Valores Mobiliários) — Portuguese securities regulator for qualifying investment funds

US Tax & Retirement Account Rules: - IRC §4975 — Prohibited Transactions — IRS rules on disqualified persons and prohibited transactions - IRC §408(e)(2) — IRA Disqualification — Consequences of engaging in prohibited transactions - IRS Retirement Topics — Prohibited Transactions — Official IRS guidance - IRS 2026 Contribution Limits — $7,500/$8,600 IRA limits - IRS Solo 401(k) Limits — $72,000/$79,500+ for 2026 (higher for ages 60-63)

US Reporting Requirements: - FinCEN FBAR Requirements — Foreign account reporting ($10,000 threshold) - IRS Form 8938 Instructions (FATCA) — Foreign financial asset reporting - IRS Form 8621 Instructions (PFIC) — Passive foreign investment company reporting

US-Portugal Tax Treaty: - US-Portugal Tax Treaty (1994) — Full treaty text including saving clause

Disclaimer: This guide is for informational purposes only and does not constitute tax, legal, or investment advice. The IRS has not issued guidance specifically addressing the use of retirement funds for Golden Visa investments. Consult qualified professionals before proceeding.