As more and more people rush to include Bitcoin in their IRAs to profit from its potential gains in a tax-advantaged way, you might catch a serious case of “fear of missing out” and give in to the temptation of following suit.
However, the last thing you want is to fly blind when it comes to securing your financial future. Rather, you want to ask all the right questions, and better yet, find the right answers before changing your future financial situation on Bitcoin.
Now, there are tons of questions to ask, but in this article, we will highlight the top 3 questions every person has when they think about investing Bitcoin in their IRA.
Let’s get started.
1. How do I go About Buying Bitcoin in an IRA?
Since including Bitcoin in your IRA is a relatively new idea, many people still do not know how to go about it. So, if you are one of them, here is a step-by-step guide on how you can buy bitcoin in an IRA:
- Establish a self-directed IRA with a custodian like Viva Capital that best matches your investment needs.
- Deposit the money you need to pay for the Bitcoin within your self-directed IRA.
- Save or trade your Bitcoin assets to grow your portfolio.
Keep in mind; you need to hold Bitcoin in the IRA until you are 59 ½ years old to enjoy tax benefits. If not, you will pay a penalty for early withdrawal.
2. How Do I Move My Bitcoin Into My IRA?
To store your bitcoin into your IRA, you first have to find a reliable self-directed IRA custodian. After finding your ideal self-directed IRA provider, make arrangements with them to roll over your current IRA funds to the self-directed IRA. Once that is done, you can use the money to purchase Bitcoin in your self-directed IRA.
3. Can I Use My IRA to Buy Bitcoin?
Investing in Bitcoin using your traditional IRA is not possible. You need to open a self-directed IRA that allows investors to purchase cryptocurrency, in this case, Bitcoin, in their accounts.
This IRA is known as a Crypto or Bitcoin IRA. What might pass for your traditional IRA is a Bitcoin ETF, but even so, these investments do not have literal Bitcoin. Rather, they invest in Bitcoin futures.
Want to Retire Comfortably? Invest Bitcoin in Your IRA Today!
With the bull run Bitcoin has experienced since its inception in 2009 when it was worth $0, it is certainly a good idea to include it in your IRA. Besides the obvious great returns you stand to reap, having Bitcoin in your IRA allows you to diversify your retirement account and enjoy significant tax advantages.
Not to forget, if Bitcoin experiences an excellent rally in the future, you could very well retire sooner. But before you rush into things, investment professionals advise that you learn all the risks involved and gauge your risk tolerance prior to adding Bitcoin into your IRA.