A cryptocurrency IRA is a retirement account that works just like any other tax-advantaged retirement account. You can choose to make regular pre-tax contributions into the account, allowing you to invest pre-tax dollars into an investment that has significant potential to grow in value over time. You can also choose to roll over assets from an existing retirement account such as an IRA, 401(k), 403(b), or TSP account into a cryptocurrency IRA.
The main difference between a cryptocurrency IRA and a conventional IRA is that rather than investing in stocks or bonds, you are investing in cryptocurrencies. What makes cryptocurrencies such a great investment asset?
Cryptocurrencies are privately issued digital currencies that users and investors trust not to become devalued like central bank-issued fiat currencies. There are no limits to the number of dollars that the Federal Reserve can create out of thin air. But the supply of Bitcoin is limited to 21 million bitcoins, and other cryptocurrencies have similar limits on their issuance. Once all the units of those cryptocurrencies have been created, no more will be issued.
That makes cryptocurrencies a great investment for those looking not only to benefit from coming cryptocurrency price growth, but also for those looking to hedge their investments against inflation and currency devaluation. Think of cryptocurrencies as the digital equivalent of gold and silver, but with the potential for even greater price appreciation.
If you’re interested in learning more about how to invest in cryptocurrencies, contact Coin IRA to find out everything you need to know. Our experts can guide you through every stop of the cryptocurrency IRA process.
Like any other IRA, cryptocurrency IRAs are subject to various government rules and regulations. Some of these include:
Minimum Age for Distributions
You have to be 59 ½ to be able to access the funds in your IRA without having to pay an early withdrawal penalty. If you take a distribution from your cryptocurrency IRA before you reach the age of 59 ½, you will have to pay a 10% penalty in addition to any income taxes you may owe.
With a non-Roth cryptocurrency IRA you will have to pay income taxes on your investment gains upon distribution, just as with other types of retirement accounts. However, contributions to your cryptocurrency IRA are not taxed. You can also roll over funds from existing retirements into your cryptocurrency IRA without tax consequences.
Required Minimum Distributions
Cryptocurrency IRAs are also subject to the same required minimum distribution regulations as other IRAs. That means that once you turn 72, you’ll be required to start taking distributions from your cryptocurrency IRA.
If you want more information about how to invest in a cryptocurrency IRA, contact Coin IRA today.