If you know anything about personal finance, you know how important it is to prepare for your retirement. Most people who prepare for their retirement have an IRA, or individual retirement account. An IRA is like a savings account with more restrictions, but it offers higher interest and special tax privileges.
But did you know you can set up an IRA and prepare for retirement using cryptocurrency like Bitcoin?
That’s what you’re about to find out in this BitIRA review.
One problem people have with traditional IRAs is that, when you place traditional fiat currency in an account, your dollars go down in value every year. To make up for the currency’s depreciating value, you have to earn an awful lot of interest. Often, an IRA account simply doesn’t make the cut.
Unlike fiat currency like U.S. Dollars, however, Bitcoin and other cryptocurrencies tend to go up in value. For crypto invested in an IRA, that means not only are you earning interest, but your existing crypto assets are likely to increase in value.
Many people use BitIRA for their retirement accounts. To find out if it’s the right choice for you, keep reading.
Understanding Bitcoin IRAs
An individual retirement account is an account that helps you save money for retirement with special tax breaks. Depending on the type of IRA you have, your contributions may be tax-deductible, or your withdrawals may be tax-free.
With ordinary savings accounts, you have to pay taxes on your income before you place it in savings. With a traditional IRA, you can send your income directly into your account without paying taxes on it first. That way, the taxes you didn’t have to pay can accrue interest over the years until you retire.
However, once you reach retirement age and are ready to withdraw money from your account, a traditional IRA requires you to pay taxes on your savings as if it was regular income. A Roth IRA, on the other hand, requires you to pay taxes on the money you contribute to your account, but withdrawals are tax-free.
A Bitcoin IRA works in the same way, only instead of investing your income directly as fiat currency, you get to invest using Bitcoin or other crypto tokens.
The reason crypto IRAs are popular is mainly that they offer a hedge against inflation. While your fiat currency is doomed to depreciate over time, most people expect cryptocurrencies like Bitcoin to continue gaining value.
However, it’s important to note that crypto investors take a considerable risk by relying on alternative digital assets. Although Bitcoin is expected to increase in value, there’s no guarantee that it will remain popular. Crypto is a very new field, so any investments should be made with a healthy amount of caution.
How BitIRA Works
BitIRA is a digital asset IRA platform that attempts to give you greater control over your investments. It goes a lot farther than simply letting you store cryptocurrencies in an IRA account. It also offers a host of useful features and services to help you invest successfully.
If you like, once you set up an account with BitIRA, you can decide what assets you want to buy and hold on your own. But if you want expert help deciding what assets to buy, BitIRA works with Preferred Trust Company to provide investors with a qualified custodian. Not only will crypto specialists be at hand to help you prepare your documents, but they will also help you roll over assets you may have stored in other IRAs.
BitIRA has experience working with key players in the field of IRA investing. These include Edward Jones, Merrill Lynch, and Fidelity, among others.
Best of all, BitIRA collaborates with some of the best experts in crypto to help clients with purchasing assets, custodial management, real-time trading, and digital currency storage.
Setting up an account with BitIRA is fairly simple and straightforward, although verifying your information and funding your account can take up to three weeks. To apply, you can fill out an online application on their website or contact them through their help desk. If you need help, you can also contact their staff online or via telephone.
BitIRA is known to have excellent customer support staff. They can help you with any necessary documentation, and they’ll also keep paperwork to a minimum.
Once your account is set up and funded, you can invest in several different types of crypto tokens. From there, it’s just a matter of letting your assets grow until you retire.
BitIRA Review FAQ
As you look at platforms for Bitcoin IRA investing, you’re going to have a few questions. Here are some answers to commonly asked questions.
What Cryptocurrencies Does BitIRA Support?
According to BitIRA’s website, they currently offer the following tokens for holding in your IRA account:
- Bitcoin Cash
- Ethereum Classic
- Bitcoin Satoshi’s Vision
- Stellar Lumens
What Types of IRA Accounts Can I Create With BitIRA?
BitIRA offers all the popular IRA characterizations, including:
- Traditional IRA
- Roth IRA
- SEP IRA
- SIMPLE IRA
What Fees Are Involved in Using BitIRA?
BitIRA doesn’t list any fees or pricing structures on its website. According to them, because every IRA account is different, fees will vary from one customer to another. They recommend that you contact their representatives with questions about their prices.
How Long Does It Take to Set Up a BitIRA Account?
There are several factors that help determine how long it may take to set up your crypto IRA account.
If you’re transferring assets in from a different IRA, it can take longer to get your account funded depending on how long your old IRA provider takes. Normally, it should take between one and three weeks to set up and fund your account, after which point you can begin buying cryptocurrency.
Are BitIRA Accounts IRS-Compliant?
Yes, these accounts are IRS-compliant. Cryptocurrencies have been eligible for placement in individual retirement accounts since 2014, and this includes accounts offered by BitIRA.
Are Assets Stored in Retirement Accounts Secure?
According to BitIRA, it has developed the first insured cold storage solution for digital assets stored in IRAs. This means that assets managed by BitIRA are stored in secure offline environments, such as on hard drives in high-security facilities. Because these digital wallets aren’t connected to the internet, it’s highly improbable for hackers to be able to steal your assets.
Pros & Cons of BitIRA
- Extremely secure facility and dollar to dollar insurance on your digital IRA
- Offers tax-free investing
- Expert staff to help with your transactions
- In-depth reports on account holdings
- Flexible accounts to help ensure a diverse portfolio
- Ability to keep your crypto without converting to cash
- The website does not disclose fees
- High minimum deposit
- Young company, not much of a detailed track record
Frequently Asked Questions About BitIRA
We’ve compiled some answers to questions we often get. Should you have any other questions, feel free to reach out below in the comments.
Are the Digital Currency IRAs Created by BitIRA IRS Compliant?
Yes, in 2014 the IRS declared cryptocurrencies such as Bitcoin are classified as personal property for taxation purposes. Although the tax agency did not specifically state that Bitcoin could be placed into an IRA, this ruling does make digital currency eligible to be placed in self-directed IRAs.
Is My Current Account Eligible to Rollover to A Digital Currency IRA?
If you have an IRA, yes, it will be eligible for a rollover to a digital currency IRA. You can roll over your existing IRA to another custodian as often as you like. The same rule applies to any type of IRA, such as traditional, Roth, SEP, or SIMPLE.
Are There Any Penalties to Sell The Cryptocurrencies in my IRA?
As long as you keep your IRA funds within the umbrella of your account, there are no penalties; you can move from any eligible asset to another, and as often as you would like. However, like any IRA, if you take any form of distribution before you are eligible to do so there would be penalties.
If I Take A Distribution, Can I Keep My Cryptocurrency?
Yes, once it’s distributed, if you want to keep the cryptocurrency instead of converting it to cash, BitIRAs partner custodian, Preferred Trust Company, will allow you to do so.
Can I Buy For a Bitcoin Roth IRA?
Yes, you have the option of creating any characterization of IRA that you would like for your cryptocurrency, just as you would for any other asset class. In addition to moving Bitcoin to a Roth IRA, you can also set up a Traditional IRA, SEP-IRA, and SIMPLE IRA.
Getting Started With Crypto Investing
With that, you should now have everything you need to know. Hopefully, this BitIRA review has helped you decide where it should fit into your retirement strategy, or whether you should use an alternative platform.
Crypto investing is a relatively new field, and people are still figuring out the best ways to utilize these alternative assets. Unfortunately, that means there’s a lot of confusion and misinformation out there, which makes it harder for beginners to get started.
The good news is BitCompare is here to point you in the right direction. Keep reading our reviews for more crypto advice.