Bitcoin IRA drawbacks include high fees and the responsibility of managing your own account.
Not a day goes by without bitcoin being in the news. And given the cryptocurrency s phenomenal price rise, from zero to approximately $32,000 in a little over a decade, you - like many other individual investors - may be tempted to buy in. But how?
Actually, you can invest in finance s newest asset via one of its most familiar vehicles: the IRA. Yes, you can buy bitcoin for a good old individual retirement account.
Cue the excitement? Maybe. In many ways, bitcoin investments are well-suited to an IRA. But, as with any investment strategy, there are pros and cons to consider.
This is still a young field, and information on a firm may be hard to come by. Frankly, some are little more than sales platforms. So, no matter which custodian you re considering, be sure to do your due diligence on it.
Visit its website or call its customer service line to confirm and compare its fee structure, operations. Ask how your bitcoins will be stored, exactly, and about security procedures and measures you don t want your account holdings vulnerable to hackers.
Why invest in a bitcoin IRA?
There are plenty of positives to consider with bitcoin IRAs.
Portfolio diversification. Bitcoin tends to be a great diversifier for your financial assets, Bogner explains. Holding a bit of bitcoin can be a good way to own something that doesn t move exactly like the rest of your investments move, she says. It could also be a hedge against inflation as the dollar s value against some other currencies has declined.
Want More Tax-Free Income? Max Out Your Roth IRA in 2021!
January 16, 2021 9:03 AM newsfeedback@fool.com (Charlene Rhinehart, CPA)
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January 18, 2021 9:49 AM
If you’re tired of paying taxes on every dollar you earn, you need to explore the benefits of a Roth IRA (individual retirement account). It’s a tax-free gift on earnings that comes with built-in benefits you can enjoy now and later. You just have to make sure you have earned income, and that you fall below the income thresholds that prevent some from making Roth contributions.
You won’t get any tax break on the money you use to fund the Roth IRA, but all of your earnings grow tax-free. After you reach age 59 and a half and meet the five-year rule, every penny in your Roth IRA is yours to keep no need to split your earnings with the IRS. If you’ve ever dreamed of building a six- or seven-figure retirement fund, the Roth IRA makes this dream possible without the uncertainties of paying ta
Channel3000.com
December 14, 2020 5:22 PM Miranda Marquit - Forbes Advisor
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December 15, 2020 12:55 PM
You may already know that contributing to a Roth individual retirement account (IRA) is off-limits for people with high annual incomes. If your earnings put Roth IRA contributions out of reach, a backdoor Roth IRA conversion is a great option that lets you enjoy the tax benefits of a Roth IRA.
How Does Backdoor Roth IRA Work?
A backdoor Roth IRA isn’t a special type of individual retirement account. Rather, a backdoor Roth IRA is a strategy that helps you save retirement funds in a Roth IRA even though your annual income would otherwise disqualify you from accessing this type of individual retirement account.