When you think of retirement, you may think of individual retirement accounts (IRAs). You also might think about bonds and stocks, the conventional method of investing. But with times changing, and new investment opportunities arising, some are looking to cryptocurrencies as the future of retirement accounts.
Diversifying your investments is always the way to go, and in recent years more and more people have been turning to crypto, precious metals, real estate, and more to seek higher returns and higher risk tolerance.
And, with ether currency going from around $9 to $60 us, the potential of investing in crypto for your retirement account could be great. If you’re someone who believes the currency has long term value, this type of IRA is for you.
But what are the more specific benefits of Ethereum IRAs and how could this investment opportunity serve you, in the long term?
Self-directed IRAs
If you want to start investing in crypto, chances are you might also start managing your own IRA. Usually, a professional manager will handle your investments using your funds. Managing your own funds means having control over your own assets.
When you start to manage your own investments you take all the responsibility for bad investments. Meaning you will have to do proper research and make the tough decisions on selling or buying your crypto.
But you’re not all on your own. When you first start your Ethereum IRA with BitRA, a custodian will take care of administrative tax-related tasks so you won’t have to worry about the small details.
Short Term Benefits
Ethereum IRAs, like any retirement accounts, have long and short term benefits. At the end of the day, everyone is different and has different needs. Here are some short term benefits that might help you decide whether a crypto retirement account is right for you.
Diversifying your investments by starting an Ethereum IRA could help protect you against loss in stock value. Since Ethereum doesn’t always follow market trends, if the stock market crashes, chances are your crypto investments will be fine. Although it’s important to remember that crypto is a whole new asset class, and learning about the risks involved is important for anyone looking to start their own Ethereum IRA.
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Another bonus of an Ethereum IRA is as long as the regulations are followed, you won’t have to pay a cent of tax on your investment until you withdraw from your retirement account. This is very different from most retirement IRAs
The Risks of Ethereum IRAs
Investing in c crypto IRA isn’t for every investor though. Although diversifying your retirement account is a risk-reducing factor, crypto is considered a speculative investment, which is high risk. Therefore, it’s recommended that only those with a high level of experience or good financial standing are well enough equipped to take a potential investment loss.
But why hold crypto investments in a self-directed IRA? Well, with extra income and tax breaks for IRA account holders keeping Ethereum in an IRA can be beneficial. Not to mention the reduced temptation to withdraw the funds.
Fees and IRAs
Although there is little information about the exact pricing of holding an Ethereum IRA, they do say there is no annual fee. There is however a small upfront fee and annual maintenance. Ethereum IRAs will use the brave new coin data for a reference rate. Genesis global trading inc. will deal with liquidity. And finally, digital assets and investment funds will be handled by the BitGo wallet.
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Individual retirement accounts are a little different from 401Ks. Instead of relying on employer contributions that are not controlled by the individual, IRAs work a little differently. Giving control to the account holder to decide the size and type of contributions and what investment opportunities are taken.
Is it worth getting an Ethereum IRA?
At the end of the day, only you know what investments are right for you. However, cryptocurrency is so new. Although over the past few years it has been making big gains, pushing its way into the mainstream, and making millionaires.
But, even though it might seem like a great investment opportunity, using it for your retirement fund is a big gamble on such a new technology. And, before rushing to the bank, you should be sure you have the right plans, knowledge, and help in place so you can make the right investments.
If you don’t already have an IRA, they can be a great way to get some nice tax breaks and give you control over your own retirement. They will help you diversify your investments and protect you against stock market crashes. As long as you’re informed and aware of the risks, this might be the retirement account option for you.
How to open your own Ethereum IRAs
The first step to obtaining an Ethereum IRA is to make contact with the company through their website, and fill out the forms they provide with a custodian. Once this is done, you will be able to make the transfer of your funds from your existing retirement account into your new IRA. After that, it’s smooth sailing and you can schedule your first phone call to start live trading Ethereum coins.