In the digital age, many things are changing, including how you should save up for retirement. Assets are appearing online, and they seem to look promising. This includes bitcoin, where the volatility is high, but the rewards are higher. More about the crypto’s volatility on this page here.
Charles Johnson is currently a nurse living in Sacramento, California, and has spent much time researching bitcoins. For Charles, his social security is looking a little less attractive and promising than what he has stashed in his retirement account, that includes bitcoin.
The conclusion for Charles? He said that investing in cryptocurrencies is one of the keys to retiring comfortably. His way of doing this is through tax-free and self-directed individual retirement accounts. The IRS classifies cryptocurrencies like bitcoins as property. If his coins are inside his IRA, these will reduce the taxable expenses because of a sudden exponential increase in price.
With today’s prices, most of the gambling he has been doing is paying off. This MBA grad, husband, and father initially invested $24,000 into his IRA. Today, he says that his portfolio is up and running, and it’s nearly $250,000. While it’s currently down from the peak of $400,000, many investors believe that bitcoin is the future.
Some are becoming reclusive, and they avoid their families because they feel that no one is listening to them. Their frustrations with the low growth of their retirement and not getting their families’ support have driven them to prove their point further.
About the BitIRA
This IRA may be unique from the other traditional ones, but it can offer great rewards and risks. At the start, most of the people may have questions like is BitIRA Legit? There were still so many questions about cryptocurrency back then, and it’s not as mainstream as it is today. Fortunately, today, many investors review these companies and ensure they are involved in a trustworthy company that has handled various customer accounts.
Many of these bitcoin companies are offering the investors some tax advantages through opening an individual retirement account. This is similar to the traditional IRA, except that the account is backed by cryptocurrencies instead of funded by bonds, cash, stocks, or gold.
Some of these companies have more than a hundred thousand account holders. Clients as young as 18 are looking into their future, and most of the holders are around 45. This is not a game for younger generations anymore, but this is their chance to save more for the older ones.
BitIRAs and others are not just dealing exclusively with bitcoin either; there are many altcoins, Ethereum, Litecoin, and a long list of cryptos that they trade. This is when diversification is the right call. Having a portfolio that relies heavily on a single digital coin does not make any sense. While bitcoin is one of the most important today, the share capitalizations are decreasing over time because it only has a limited supply. There are so many tokens to choose from in the market today.
The corporations that handle these transactions served more than $6 million in crypto transactions in 2017. They served thousands of transactions and have even reached an all-time high of $1.5 billion. So far, the market is now flooded with various options if you want to explore the space of crypto retirement, so it’s essential to choose well.
Surveys with financial advisors show that 14% of them have taken an interest or even shifted to cryptocurrency. The advisors are now recommending crypto to their clients as opposed to the 1% in 2019.
The number of people wanting to get comfortable when they retire is staggering. These individuals don’t want any zombie retirement accounts that only allow them to invest in “safe” and target-date funds. More about these kinds of funds can be found here: https://www.fool.com/retirement/strategies/target-date-funds/.
Overall, everyone wants to increase the value of their assets over the long term. They enjoyed many choices when it comes to their hard-earned money, and of course, everyone wants to join because they fear missing out. If this is you, it’s very important to research and spend at least 20,000 hours researching crypto and know how they work because your life savings are at stake.
Roth IRA vs. 401 (k)
Portfolios that are backed by cryptocurrency are gaining in popularity, but the significant limitations are there. It’s worth noting that you have various options for investing your savings for your retirement. You can choose to open a Roth IRA, or you may already have an employer-sponsored one. These are the very few vehicles that will allow you to alternate between assets like crypto or gold.
This is why the primary vehicle for retirement with crypto assets is an SDIRA. As its name implies, this account is something that you open with the help of a custodian. However, you’re still the one making the investment decisions.
The IRS considers this as a property, and there are many regulations to follow when you try to explore the 401(k) space. There are exceptions, though, as participants are now allowed to allocate at least 5% of their funds into various crypto coins, which can be managed and custodied by Coinbase. There’s still a way to go before bitcoins hit mainstream retirement platforms, but many believe it’s getting there.