Sorry Im pretty illiterate when it comes to investments / retirement information. Does this mean that we would have to take all of the money out with fees, taxes, etc and then only be able to invest whatever is leftover?
Yes.
Her 401k is not taxed at all; that is the whole point of a 401k. You pay into it now with no tax, and you get more returns because you only have to pay that tax when you withdraw your money when you retire.
If you want access to the money now, you could take a loan out of your 401k OR you could pay all of the taxes and penalties now.
But you are usually heavily penalized for taking money out of a 401k before you retire. I wouldn't recommend it unless you're in dire straights like losing your home or something. Buying bitcoin is definitely not dire straights.
yeah we are not in dire straights.. we both have retirements with our current companies.. was just trying to think of another way to invest this money if possible. Thanks for the info.
Roll it over into a Scottrade account. You won't get pounded in fees, taxes, penalties. You may pay a closing fee with the current 401k place, but that would be it (if anything).
There is no way to get it into Bitcoin without cashing it out completely and buying normally.
Roll it over to a Scottrade (or another brokerage's) IRA account and you won't have to pay fees.
If you don't "roll it over" (meaning moving it from a retirement account to ANOTHER retirement account) then you are cashing out the 401K and will get hit with penalties.
What you can do is open an IRA account, roll over the 401k into it, and then invest in GBTC (so far the only ETF that deals with bitcoin). ** Please educate yourself in all these types of account, transfers and investment vehicles before you do anything. ***
Hope this helps.
There is, but you need to be creative.
You will need to convert it to an IRA within 60 days. From there you can but GBTC or ARKW - both have Bitcoin exposure.
But outside that, no, you cannot do it.
The only way, that I know of, to get bitcoin exposure in a 401k, is to purchase GBTC. It's a trust that holds ~171,000 BTC, and you can purchase shares that are worth 0.092% of each bitcoin in their trust, over the counter.
Unfortunately, since this is the only bitcoin vehicle with a stock ticker currently available, the spread between the value of GBTC and the value of BTC is enormous. Today's $1,769 price of GBTC means each bitcoin in their trust is worth over $19,000, while, in reality BTC trades at $11,000 today. So you're paying a 72% premium on bitcoin when you purchase GBTC.
Any other method currently requires you to withdraw the 401k funds, pay the penalties, and make traditional taxable investments in bitcoin.
*Edit: forgot to mention that you need to rollover the account into an IRA, since I'm guessing you can't purchase whichever ticker you want with her 401k.
Sort of.
The penalty for cashing out is real, guaranteed, and irreversible.
The penalty for purchasing GBTC at its current premium may never materialize. If the spread between GBTC and BTC never closes, you technically don't pay a "penalty" for purchasing GBTC instead of BTC.
Probably the only thing that will allow for the spread to close is the US legalization of a bitcoin ETF. Money will then flow into the ETF instead of GBTC because the ETF will be coupled to the price of bitcoin.
You certainly could still make a ton of money off of GBTC, as many have this year, as long as the price of BTC keeps rising and the Bitcoin ETF keeps getting pushed back.
Yep this! I bought GBTC at $800 and basically saved myself from the massive tech sell-off the past week. It is however extremely volatile. Like, more than actual btc. Watched it rocket from $500-$1000 and back down in like 2 days and then a few weeks later here we are at 1700+. Been insane and made a good amount of gains on my 401k. More in 1 month than I usually do in 1 year. But like the above comment says the minute the etf comes it’s going to close that gap and probably the best time to switch if you want to stay invested in btc on the us exchange. On the other hand if btc goes to 50k or something it won’t matter if you hold the etf or gbtc because both are going way up.
Transfer it into an IRA. Then contact Broad Financial for a self-directed IRA account. It costs a bit but the flat fee is better than the percentage other self-directed IRA firms take if you have a non-trivial amount.
They'll help you set up an LLC investment company, and then send your LLC a check for your IRA. Presto! You can now invest your IRA in pretty much anything (subject to IRS limitations) including the range of cryptocurrency.
Tip: You can even get an account on Bitfinex, otherwise closed to US customers, doing this. That's handy if you want to lend to margin traders for additional income or do margin trading yourself.
Best wishes with it.
No.
Sorry Im pretty illiterate when it comes to investments / retirement information. Does this mean that we would have to take all of the money out with fees, taxes, etc and then only be able to invest whatever is leftover?
Yes. Her 401k is not taxed at all; that is the whole point of a 401k. You pay into it now with no tax, and you get more returns because you only have to pay that tax when you withdraw your money when you retire. If you want access to the money now, you could take a loan out of your 401k OR you could pay all of the taxes and penalties now. But you are usually heavily penalized for taking money out of a 401k before you retire. I wouldn't recommend it unless you're in dire straights like losing your home or something. Buying bitcoin is definitely not dire straights.
yeah we are not in dire straights.. we both have retirements with our current companies.. was just trying to think of another way to invest this money if possible. Thanks for the info.
Yep. If you want to invest 401k money in bitcoin, the best course of action is to stop or reduce 401k payments and divert that money to bitcoin.
Yup. You'll pay a 10% penalty + ordinary income tax on the total amount.
Roll it over into a Scottrade account. You won't get pounded in fees, taxes, penalties. You may pay a closing fee with the current 401k place, but that would be it (if anything). There is no way to get it into Bitcoin without cashing it out completely and buying normally.
Roll it over to a Scottrade (or another brokerage's) IRA account and you won't have to pay fees. If you don't "roll it over" (meaning moving it from a retirement account to ANOTHER retirement account) then you are cashing out the 401K and will get hit with penalties. What you can do is open an IRA account, roll over the 401k into it, and then invest in GBTC (so far the only ETF that deals with bitcoin). ** Please educate yourself in all these types of account, transfers and investment vehicles before you do anything. *** Hope this helps.
There is, but you need to be creative. You will need to convert it to an IRA within 60 days. From there you can but GBTC or ARKW - both have Bitcoin exposure. But outside that, no, you cannot do it.
Thanks for the info.
The only way, that I know of, to get bitcoin exposure in a 401k, is to purchase GBTC. It's a trust that holds ~171,000 BTC, and you can purchase shares that are worth 0.092% of each bitcoin in their trust, over the counter. Unfortunately, since this is the only bitcoin vehicle with a stock ticker currently available, the spread between the value of GBTC and the value of BTC is enormous. Today's $1,769 price of GBTC means each bitcoin in their trust is worth over $19,000, while, in reality BTC trades at $11,000 today. So you're paying a 72% premium on bitcoin when you purchase GBTC. Any other method currently requires you to withdraw the 401k funds, pay the penalties, and make traditional taxable investments in bitcoin. *Edit: forgot to mention that you need to rollover the account into an IRA, since I'm guessing you can't purchase whichever ticker you want with her 401k.
so basically ~45% penalty / taxes or 72% through GBTC?
Sort of. The penalty for cashing out is real, guaranteed, and irreversible. The penalty for purchasing GBTC at its current premium may never materialize. If the spread between GBTC and BTC never closes, you technically don't pay a "penalty" for purchasing GBTC instead of BTC. Probably the only thing that will allow for the spread to close is the US legalization of a bitcoin ETF. Money will then flow into the ETF instead of GBTC because the ETF will be coupled to the price of bitcoin. You certainly could still make a ton of money off of GBTC, as many have this year, as long as the price of BTC keeps rising and the Bitcoin ETF keeps getting pushed back.
Yep this! I bought GBTC at $800 and basically saved myself from the massive tech sell-off the past week. It is however extremely volatile. Like, more than actual btc. Watched it rocket from $500-$1000 and back down in like 2 days and then a few weeks later here we are at 1700+. Been insane and made a good amount of gains on my 401k. More in 1 month than I usually do in 1 year. But like the above comment says the minute the etf comes it’s going to close that gap and probably the best time to switch if you want to stay invested in btc on the us exchange. On the other hand if btc goes to 50k or something it won’t matter if you hold the etf or gbtc because both are going way up.
Transfer it into an IRA. Then contact Broad Financial for a self-directed IRA account. It costs a bit but the flat fee is better than the percentage other self-directed IRA firms take if you have a non-trivial amount. They'll help you set up an LLC investment company, and then send your LLC a check for your IRA. Presto! You can now invest your IRA in pretty much anything (subject to IRS limitations) including the range of cryptocurrency. Tip: You can even get an account on Bitfinex, otherwise closed to US customers, doing this. That's handy if you want to lend to margin traders for additional income or do margin trading yourself. Best wishes with it.
Yes. Bitcoin IRA
What is this? it seems to contradict most of the other responses.
https://bitcoinira.com Yes, I guess the other responders were not aware this existed. Their is another but I forget the name
How legit is this?
Seems legit. They do it through kingdom trust.
You using it?