In today’s issue, DAIM’s Bryan Courchesne discusses how bitcoin can be included in U.S. individual retirement accounts, what to watch out for, and the importance of working with a financial advisor.
Next, Eric Tomaszewski of Verde Capital Management shares tips on preparing for tax season in Ask and Expert.
–Sarah Morton
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Bitcoin Could Be on the Poised for a Major Breakthrough: Is Your IRA Ready to Seize This Opportunity?
Top researchers and major investors are setting price targets for Bitcoin, projecting that it is potentially on the brink of a significant bull run. Tom Lee says bitcoin will cost $250,000 this year, and Michael Saylor says bitcoin will hit $500,000 overnight.
Imagine having a substantial allocation of Bitcoin in your retirement account before this bull run kicks into high gear – a tax-advantaged allocation funded by an old Individual Retirement Account (IRA) you may have forgotten about. The opportunity is right in front of you, but it’s essential to set it up correctly with a platform that offers comprehensive support and peace of mind.
Step 1: Manage your IRA yourself or work with an advisor
When investing in Bitcoin through your IRA, security and compliance are paramount. A qualified custodian ensures that your retirement assets are managed in accordance with IRS regulations, providing a layer of protection beyond simple portfolio management. If you choose a self-directed method, know that it will be up to you to manage the transfer and make investment decisions. If you use an advisor, they will manage most of the transfer process for you, including portfolio management.
Self-management means you need to monitor your investments, which are vulnerable to errors, fraud or mismanagement. An advisor has conducted due diligence with service providers and regularly monitors accounts to achieve the best outcome.
Step 2: Set Up Your Tax-Advantaged Crypto IRA
Once you’ve chosen a platform or self-directed advisor, the next step is to sign up, which involves signing and approving a client agreement. Although the process is similar for both options, working with an advisor offers key benefits. An advisor can help you design a portfolio that fits your risk profile, guide you in determining appropriate position sizes relative to your other investments, and help you implement a long-term investment plan that fits your needs. your financial goals. In contrast, standalone platforms don’t provide personalized advice, don’t care what you buy, and often have incentives to encourage frequent trading, which can erode your returns over time.
Additionally, having the right IRA structure in place is crucial. For example, if you already have a traditional IRA, you will need to open a new traditional IRA with the crypto IRA provider to maintain consistency. Transferring assets can be complicated, especially if you don’t know which investments to sell, how many to roll over, or how to follow the transfer process. An advisor can guide you through these steps, handling much of the complexity and ensuring a smoother experience.
Step 3: Invest for Growth as the Crypto Sector Grows
As noted above, a self-directed platform leaves you alone to select investments, determine position sizes, and decide when to buy or sell. If you have confidence in your ability to outperform the market and manage these decisions independently, this approach might work for you, but it takes time, expertise and discipline, with no safety net if mistakes are made. are committed.
On the other hand, working with an advisor offers a definite advantage. Advisors provide advice tailored to your financial goals, help you select high-quality investments and can offer predefined, proven portfolios. Rather than going it alone, you’ll have access to a team of experts whose full-time job is managing digital assets and staying ahead of industry trends.
As many experts predict, Bitcoin’s next bull run could send prices into six figures. By obtaining a Bitcoin IRA today, you can position yourself to benefit from this potential growth while taking advantage of tax advantages and professional management to support your long-term success.
– Bryan Courchesne, CEO, DAIM
Ask an expert
Q. It’s the start of a new year. What things should I consider so I can start the year effectively?
It’s important to focus more on systems than goals. Goals will give you direction, while systems will create progress. Identify daily and weekly actions that will help you achieve greater goals, personally and professionally. From there, start small, repeat regularly, and pair new habits with existing ones to help you remember and reinforce them.
Q. It’s 2025, so what strategies can I use for tax year 2024?
Fortunately, it’s not too late to take advantage of tax deductions, as there are a range of options to consider. Traditional IRAs, health savings accounts (HSAs), and contributions to self-employed retirement plans – such as those made through a SEP IRA or Solo 401(k) plan for self-employed or entrepreneurs – are just a few -one of the available options.
Q. How do I manage an upcoming tax bill in April?
It all comes back to planning. If you face this situation today, work with professionals to project the amount needed.
From there, prioritize your cash flow needs and goals for the coming months while developing a payment plan.
This may require adjusting your budget and exploring creative payment options, such as IRS installment plans, title loans, and more.
– Eric Tomaszewski, financial advisor, Verde Capital Management
