How to Buy Bitcoin with a 401(k): Your Essential Guide

By Altay Gursel | February 22, 2021
Home / Rollover / 401k / How to Buy Bitcoin with a 401(k): Your Essential Guide

The right way buying Bitcoin With a 401(k)

buy btc 401k

Even if you don’t become a bitcoin millionaire, with your 401(k) or standard IRA, buying bitcoin could be an excellent time right now. When you ask yourself, “Should I bring my 401(k) into Bitcoin? “The conclusion is, maybe, yes. This depends on your circumstances so read on to know more.

This post describes some of the eligibility requirements to buy Bitcoin with your 401(k) funds by transferring it into a Bitcoin IRA, showing you the benefits of making this transfer, and outlining the three steps to get started.

Having an investment in bitcoin offers a wide range of benefits for your retirement assets that standard investment vehicles cannot provide.

You earn a tremendous amount of freedom of choice by investing your 401(k) assets in bitcoin (which can be done by transferring your investment account into a self-directed IRA). That’s when you’ll be willing to select from more choices for your retirement portfolio than the traditional investing options typically found on the market.

But, before choosing to roll over the 401(k) into a Bitcoin IRA, there are still a series of other considerations to address. Self-directed IRAs (SDIRAs) are a fairly obscure type of IRAs that allow exposure to asset groups that can have exceptional growth potential. And, before making a decision, you should completely comprehend everything that there is to learn regarding this golden opportunity.

Finally, since most people don’t completely grasp how to get started transferring their 401(k) accounts into cryptocurrencies such as bitcoin, bitcoin cash, ethereum, or ripple, this post will clarify this as well.

Regal Assets allows you to invest in Bitcoin from your IRA (Ultra-secure vaulting, theft free & fully ensured.)

To learn more you should keep reading: 

Why do people transfer their 401K savings in Bitcoin?

Here I have listed the key reasons why people do so.

1. The Next Big Thing

Jumping in at the “next big thing” is a huge threat to the central banking system. Bitcoin and other cryptocurrencies represent one of the 21st century’s most revolutionary inventions. You still have time to enjoy the rewards of the investment and possibly build wealth.

2. Tax-Deferred Asset Protection

You will utilize tax-deferred real asset protection by transferring 401(k) investments in a Bitcoin IRA. Digital money, such as cryptocurrency, is considered as personal property according to IRS Notification 2014-21. Gains that you accrue will be kept tax-free until you take a distribution.  So when you purchase bitcoin into your IRA and sell it later by holding the money inside the portfolio, you do get a major benefit.

Under that case, you will reinvest your profits into another IRA-eligible asset and even receive tax-deferred benefits. These investments may include bonds, stocks, mutual funds, ETFs, precious metals, private equity, and other forms of investment instruments.

3. Diversify Your Retirement Savings

You will further diversify your retirement savings by transferring some of it into a Bitcoin IRA. As you likely know, you can never throw all your eggs in one basket when it comes to assets. By using this emerging asset type, you will broaden and protect your retirement funds.

4. You have the Control

With quick, safe, peer-to-peer confirmation and authentication you get to leverage the blockchain’s strength. Bitcoin runs directly between person to person, with 100 % secure network blockchain that completes the transaction. This helps you to take back ownership of your retirement from the “middle men” including governments and banks.

5. Hedge Against The Inflation

A portion of your retirement savings will be shielded from inflation. Most digital cryptocurrencies have a strict cap on how many coins are available (including bitcoin). All cryptocurrencies are getting increasingly challenging to obtain as supply increases. This is known as adaptive scaling. A Bitcoin IRA helps you to protect your investments against inflation, unlike easy-to-get fiat currency that is issued on demand.

6. Take care of your assets

You will take care of the assets of the old 401(k), and that is not under the power of the decisions of the central bank. Cryptocurrencies like bitcoin aren’t dependent on the central banking system efficiency. When you are using crypto you are autonomous and there is no governing organ from which the money passes. It ensures that you have full control of your savings.

7. Protection Against market extremes

Diversify against a “stock bubble” which might turn the retirement fund into dust. The stock price corrects for overvalued stocks approximately twice a decade. When you don’t invest your funds in the right places, the outcomes for your retirement savings may be serious. By rolling at least some part of your 401(k) into a Bitcoin IRA you hedge your funds against unexpected surprises.

There are clear details you need to learn before you can take full advantage of these rollover incentives. So there are 3 measures you will need to take.

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Should you buy Bitcoin with Your 401(k) Savings or Standard IRA?

You will convert your 401(k) savings to purchase bitcoin within a few days from now. Yet most 401(k) plans do not permit Cryptocurrencies to be purchased directly. So the simplest and cheapest way to get the benefits that we have identified above is to use a self-directed Digital IRA.

“Self-directed” implies you have the control. Although that might seem complicated, it’s very simple. Plus, you are willing to retain complete ownership of your funds. In fact, IRS rules allow these kinds of IRAs to invest in a full asset range, just like bitcoin. These can involve precious metals, private equity, and more.

Verify if you are eligible

The key rule is that you have defined a 401(k) from a former employer as a full-time employee, if you are over 59.5 years old. Based on the form of retirement program you have, certain qualifying conditions can differ, such as a Roth IRA, 403(b), 457 as well as a Thrift Savings Plan (TSP).

Please keep in mind that the rules controlling the ability to transfer a 401(k) to an IRA are not quite straightforward and can differ for each individual. If you are unsure or concerned regarding your own qualifications, please contact an expert company like Regal Assets to get an individualized solution for your case.

They have IRA experts who are well knowledgeable in the 401(k)-to-Bitcoin IRA rollovers rules. If you’re making an investment in bitcoin for your SDIRA, they will support you with the whole transfer process to make things fast and convenient. 

Below are the steps to follow to transfer your 401(k) investments into bitcoin:

You create and invest in a self-directed Digital IRA under a qualified custodian, and you can continue the cycle of rolling your 401(k) assets into a bitcoin retirement account.

To set up a new account, your IRA professionals will handle as much of the paperwork as you might like; they can adapt to your level of comfort. With Regal Assets, your current custodian would be Preferred Trust Company, a licensed trust firm with a strong emphasis on self-directed IRAs. PTC’s custodian fees are one of the industry’s most attractive, particularly because they apply to Bitcoin IRAs.

Regal Assets works with PTC for the bitcoin exchange to buy the latest digital currency investments on your behalf. Through running one of the biggest exchange partners networks in the cryptocurrency industry, they guarantee that the trade is done with excessive pace as you buy and sell cryptocurrencies.

Through their patented approach, the world’s first completely backed cold storage account for bitcoin IRA, the Bitcoin will be deposited in a secure digital account. So simply said, there is no better level of security for your Bitcoin IRA investment. 

For years Regal Assets has helped Americans purchase alternative investments for their IRAs. The company is completely equipped to support you rapidly and conveniently roll your 401(k) investments to Bitcoin.

You can contact Regal Assets and learn any questions that will help you along the process.

Regal Assets professionals will help you with the entire process including managing the rollover, continuing assistance, and much more.