Before you decide to invest part of your retirement fund in a Bitcoin IRA fund, it’s well worth finding out about the various rules which are associated with purchasing Bitcoin for an IRA account. The following are Bitcoin IRA rules that you should be aware of being investing in a Bitcoin IRA fund:
- You may be penalized for prematurely withdrawing funds from your Bitcoin IRA account
Generally speaking, you must be at least 59 and a 1/2 years old, before you’re able to withdraw funds from any IRA account which you’ve set up, such a bitcoin IRA account, without incurring a penalty fee. However, in the event of a special circumstance such, you may be eligible to withdraw funds from your Bitcoin IRA account once, without incurring a penalty fee. As examples, you may be eligible for a one-off penalty exemption if you’re looking to purchase your first home or if you become severely unwell and require surgery. If you decide to pursue higher education, you may also be eligible to apply for a penalty exemption.
So if you’re in your twenties or thirties and are considering investing some of the money which you’ve set aside for your retirement in Bitcoin, if you choose to store your Bitcoin in a Bitcoin IRA account, it pays to ensure that you use your one-time penalty exemption carefully.
- You are required to pay taxes on your investment gains when you decide to withdraw funds from your Bitcoin IRA account
Whether you decide to withdraw funds from your Bitcoin IRA account when you turn 59 and a 1/2 years old or you decide to withdraw your funds at an earlier stage, if your Bitcoin investment has made you a profit, you’ll be liable to pay taxes on any profits which you’ve claimed.
However, anytime you decide to purchase Bitcoin for your Bitcoin IRA account, you won’t have to pay taxes on your purchases as the government supports individuals who are looking to provide for their retirement. So if you’re looking to save money on purchasing Bitcoin in the short term, it’s well worth considering purchasing Bitcoin to store in a special Bitcoin IRA account, to take advantage of the tax breaks, which are available for IRA investors.
- To purchase Bitcoin which will be stored in a Bitcoin IRA account you need to find a custodian
Under US law investors are unable to hold Bitcoin which has been purchased to invest in a Bitcoin IRA account themselves. Instead, investors must use a custodian to purchase and hold their Bitcoins for them, until they turn 59 and 1/2 years old or choose to make an early withdrawal.
You may also choose to use a registered IRA custodian, which purchases Bitcoin shares for their clients. An example of which is the Bitcoin Investment Trust. If you choose this option you must have a minimum net worth of $1 million dollars or bring in an annual income which totals over $200,000. Also be warned that if you choose this option, you’ll have to pay your chosen IRA custodian yearly management fees.
If you’re still interested in investing in Bitcoin IRA, there’s no better time to make your first investment than the present!