How to Buy Bitcoin in Your 401k

Regardless of your purpose with bitcoin, this year might serve as an excellent time to purchase bitcoin with your 401k or IRA. While it may seem strange for some, buying some Bitcoin with a personal IRA or 401k is quite common. If you’re eager to get your hands on this trend, you should do it now before it’s too late. Unfortunately, not many people seem to know how to buy Bitcoin with 401k. In this article, we have provided a comprehensive guide on how to buy Bitcoin with your 401k as well as some reasons why you should do so.

Why do people invest in Bitcoin with 401k?

During the last 13 years since its invention, people have done a lot of things with bitcoin, such as investing in it, trading it, purchasing it, selling it, etc. In recent years, people began to purchase bitcoin using their 401k. In addition, there are several reasons why purchasing bitcoin with 401k is widely considered a good move.

1. Leveraging tax-deferred personal property status

As stated in the IRS Notice 2014-21, digital currencies like bitcoin are treated as personal property. This means that gains you accrue can be retained tax-free until you take a distribution. However, you will also have a huge advantage if you incorporate bitcoin into your IRA and sell it later while keeping your funds within your account.

2. Diversifying retirement plan

In investment, the rule of thumb is to never put all of your eggs in one basket. So, instead of fully holding into your 401k, you can diversify your retirement plan by dividing parts of it into bitcoin. By doing this, you can expand and protect your retirement investment.

3. Protecting retirement savings from inflation

As with any cryptocurrency, bitcoin has a clear limit on the number of tokens available. Currently, there are only 2 million coins left to mine out of 21 million, a considerably limited amount. As a result, unlike fiat money that is printed on-demand, bitcoin IRA allows you to hedge your savings against inflation.

How to buy bitcoin in Your 401k or IRA

While may sound good, most 401k programs will not allow you to directly purchase a digital currency. Therefore, the best and easiest way to buy bitcoin with your 401k or IRA is to use a self-directed crypto IRA. Here’s how to convert your 401k into bitcoins.

1. Make sure you are qualified

Eligibility requirements can vary between companies. In general, you need to establish your 401k as a full-time employee of your employer and you need to be at least more than 59.5 years old.

2. Open your self-directing Crypto IRA account

This step is simple. All you need to do is to fill out the crypto IRA form and wait for 24 hours maximum to set up your account. In doing so, having a custodian is also a good idea to manage your account.

3. Fund your account

Once your account has been approved, you can fund your account and transfer the bitcoin that you’ve purchased into your wallet.

So, those are some steps that you need to do on how to buy bitcoin in your 401k. Always remember that bitcoin is a volatile asset. This means that the risk possessed by this asset is really high. So, please carefully consider your action before buying bitcoins with your 401k.