I answer a great many questions about retirement fund options and the various types of IRAs which you can choose from in order to make some savings for the future. One of the most popular questions which I am being asked right now, is how IRA account holders can use their cash to invest in cryptocurrency. Today I am going to focus on a Roth Bitcoin IRA, and how you can use either your new or existing Roth IRA account, to maximize your investments into the Bitcoin market.

Bitcoin and cryptocurrency are hot topics right now and many investors are looking to get involved, doing so with your Roth IRA is a smart choice, and here is how to get started.

What is the Roth IRA?

The Roth IRA is very similar to a traditional IRA with the exception that your contributions will be paid with after-tax funds. The compound interest options of a Roth IRA makes this a great option for young investors who are on lower-income, giving them the chance to benefit from this snowball-like interest rate. A traditional IRA is funded using pre-tax dollars, which means that you will incur tax when you decide to withdraw the funds, this is something which won’t happen with the Roth IRA.

Using the Roth IRA For Bitcoin

The good news is that the Roth IRA falls under the list of accounts which can be used to invest in cryptocurrency and Bitcoin. Whilst strictly speaking this is a more than viable option for your investment funds, many IRA providers will not facilitate such an investment, unless they have offered it to you directly. The reason behind this is that IRAs are considered captive accounts with limited investment opportunities. If you do want to invest in crypto and your provider won’t allow it, you will need to change your IRA to a self-directed IRA, identical to any other IRA account with the difference that there are no limits on investment options.

How To Do It?

Investing in Bitcoin using your Roth IRA can be done either on your own, or through the use of a full service company. Despite the fees which are involved, the best option for you is to use a company which can look after all aspects of the investment for you. The reason for this is that there are many tripwires and hazards with regards to the IRS, that you must watch out for so as to avoid incurring fees or penalties. Doing this alone requires you to set up an LLC through which to manage your investments, a process which is not easy to those who don’t understand. Employing a company to deal with the investment is a much smarter way of funding your Bitcoin wallet with your IRA funds, and removes any stress and difficulties which you may have.

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