Want to know how to convert all or part of your retirement account into a Cryptocurrency IRA?
When most investors think of IRA investments, they think of conventional financial assets such as stocks, bonds, and mutual funds. Some investors who are familiar with Self-Directed IRAs may have experience with alternative investments in their IRA, such as real estate or precious metals, but most investors don’t know that the investment options available to them in a Self Directed IRA go far beyond equities and even precious metals. Aside from collectibles that are defined in federal law, there are many other assets that may be purchased with your IRA funds.
When the IRS declared that Bitcoin and similar cryptocurrencies were property and not securities or currencies, the ability for IRAs to invest in Bitcoin and cryptocurrencies became allowed, and Coin IRA makes investing in cryptocurrencies through an IRA just as easy as investing in commonly held investments such stocks or mutual funds.
A Cryptocurrency IRA works the same way as any other IRA. If you choose to open a “Traditional” Cryptocurrency IRA, you can fund it with a transfer from an existing IRA of the same type or rollover funds from an eligible, pre-tax retirement account, such as a 401k. All the same contribution limits and tax treatment apply to a Traditional Cryptocurrency IRA as to a conventional Traditional IRA.
If you choose to open a “Roth” Cryptocurrency IRA, you can fund it with a transfer from an existing Roth IRA or any other eligible post-tax retirement account. Again, all the same contribution limits and tax treatment apply to a Roth Cryptocurrency IRA as to a conventional Roth IRA.
As with any other IRA, the IRS required that your assets be held by a custodian. That custodian is responsible for safeguarding your assets, tracking IRA activities such as 401(k) rollovers, transfers, and distributions, and reporting any IRA transactions to the IRS. In the case of a Cryptocurrency IRA, your custodian will store your cryptocurrency for you, safely and securely.
As with a conventional IRA, early withdrawals before you reach the age of 59 ½ may result in penalties and create a taxable event. And once you reach age 72, you may be required to start taking required minimum distributions (RMDs), depending on the type of IRA you have. It’s always best to consult your tax advisor for reliable information on the requirements for various types of retirement accounts you may hold.
A Cryptocurrency IRA gives you options for diversifying your retirement into more than just equities, and the potential to grow the value of your account. To learn more about the benefits of starting a Cryptocurrency IRA, contact Coin IRA today.