401K Archives

IRA and 401(k) Contribution Limits Are Increasing in 2019 – Here’s How to Take Maximum Advantage

Posted on March 25, 2019 | by [email protected]

In great news for those saving for retirement and looking to grow their investments, Americans will be able to contribute more to both their IRA and 401(k) in 2019.

The Internal Revenue Service announced that the 401(k) limit was up $500 from $18,500 in 2018 to $19,000 in 2019.

This increase applies to the 401(k) plans as well as 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan.

If you’re over 50, that’s even better news, as the the catch-up contribution limit for employees 50 and older is $6,000, which is the same as last year, but it does mean that this year those employees can put as much as $25,000 ($19,000+$6,000) in their 401(k) plan this year.

When it comes to IRAs, the Internal Revenue Service is lifting that contribution limit as well. Individual retirement accounts, or IRAs, see their ﬁrst bump in six years, to $6,000 up from $5,500 in 2018. Again, investors older than 50 can save as much as $7,000 in an IRA by utilizing the catch-up contribution limit, which, this year, remains at $1,000.

IRAs and Compound Interest

Obviously, via the magic of compound interest, younger workers are poised to beneﬁt even more if they max out their contributions.

The impact of the new IRA contribution limit is even bigger for someone who is younger. For someone at the age of 35 with $100,000 in their IRA so far, the extra decade of $6,000 annual contributions until age 65 results in a portfolio worth more than $2,700,000. Under the old contribution limit, the same investor would have been missing out on an extra $82,000 in their account.

Most Americans Miss Out on Retirement Benefits of 401(k)s

While the raised limits are great news, many Americans are expected to skip taking advantage of it. The Bureau of Labor Statistics says that only about 54 million American workers put any money at all into a 401(k) plan in 2015. Compared to the 150 workers on ﬁle that year, those numbers aren’t great.

Financial ﬁrm Vanguard said that only ten percent of participants dropped the max into their 401(k) contributions in 2016, which itself was a drop from 12% in 2013.

Bitcoin IRA Allows Account Holders to Transfer or Open Retirement Accounts

While not all Americans have an employer-sponsored retirement account, the ones that do often don’t contribute to it, either because they don’t know that they should – or because they can’t aﬀord to do so.

Whatever your particular situation is, you can learn about the beneﬁts of directing your retirement funds into Bitcoin IRA, as well as applying to start a new account, or transferring your existing account.

Bitcoin: A Dynamic Alternative Investment for a Self-Directed IRA

Posted on April 4, 2016 | by [email protected]

Most people are passive and incurious in their strategy for setting up a self-directed IRA. They most frequently take the path of least resistance, and go with a self-directed IRA in stocks, bonds or mutual funds. This is probably because they’re not aware they have other options – quite a few other options, actually.

In a self-directed IRA, you can invest in commercial rental properties, precious metals, oil and gas organizations, tax lien certificates and even private placements. One of the keys to choosing a solid and allowable alternative investment in your self-directed IRA is to work through a reputable custodian. As the Security and Exchange Commission (SEC) clearly states through its Office of Investor Education and Advocacy:

“Most IRA custodians are banks and broker-dealers that limit the holdings in IRA accounts to firm-approved stocks, bonds, mutual funds and CDs. Custodians and trustees for self-directed IRAs, however, may allow investors to invest retirement funds in other types of assets …”

Given this allowable path to an alternative investment, we highly suggest you consider an investment in bitcoin for your self-directed IRA.

Bitcoin is digital currency that originates and is sustained electronically. Unlike dollars or other fiat currency, bitcoin is not printed or controlled by any government. There is no intermediary between payer and payee. As such, bitcoin is frequently characterized as a “peer-to-peer currency.”

Bitcoin has virtues traditional money can’t compete with. You can set up a bitcoin account in no time. With a traditional bank account, you sometimes have to wait days for a new account to be approved.
Also, with bitcoin, you can send money internationally in seconds and not have to wait for approval. Remember, large banks don’t control bitcoin. Details of every bitcoin transaction are stored in a general ledger called a blockchain. But since it’s not possible to get to the person responsible for a bitcoin transaction by knowing a bitcoin address, all bitcoins transactions are anonymous.

Bitcoin reputation for quick anonymous money has definitely caught on. Businesses like Dell, Target, Amazon, Victoria’s Secret, Paypal, and many others all accept bitcoin.

Because of its volatility and possibility for very wide use, bitcoin offers solid opportunity for upside potential. It’s for these reasons, we suggest you consider a self-directed bitcoin IRA as a long-term investment.
This kind of investment is not for everyone. You have to be an accredited investor to participate. In other words, you need a net worth of a million dollars, not counting the value of your primary residence. Or you need to have an income of $200,000 dollars in each of the last two years (or $300,000 with a spouse).
You can have an IRA consisting exclusively of bitcoin, or as part of a mixed portfolio with other assets; but, in either case, your IRA must be self-directed. And to have a self-directed IRA, you’ll need a custodian. There are only a few custodians who handle bitcoin.

If you want to set up a bitcoin self-directed IRA, call BitcoinIRA at 1-800-717-1130. One of our representatives will help you initiate your account through a reputable and knowledgeable custodian.

The New Bitcoin Portfolio Diversification Strategy

Posted on March 31, 2016 | by [email protected]

Successful investing, like many endeavors, is often discussed simplistically, as though it were an either/or activity. Either you store your nest egg in an FDI-insured bank account and let it gradually accumulate a return at a paltry rate of interest. Or you do something highly speculative with your cash — like play the futures market or slap money down on momentum stocks – with an eye towards a quick and luxurious return on your investment.

There’s something to be said for both extremes. It certainly makes sense to keep cash on hand in case of an emergency. Having enough cash available to cover six months’ worth of your basic expenses is a good rule of thumb. But keeping the bulk of your portfolio in cash, especially at current reduced rates of interest, is foolhardy. A portfolio consisting solely of cash in the bank can never grow enough to fund you in your retirement years.

Still, highly aggressive investments in vehicles like momentum stocks or the futures markets can wipe out an unseasoned investor in months or even weeks. But a diverse portfolio that allows for ample protection as well as a bit of rapid growth is a good way to go.

Towards this end, a portfolio consisting principally of gold – physical gold – and a moderate quantity of bitcoin can work very well for a lay investor. Here’s why. Gold has been around for thousands of years. As former U.S. Mint Director, Ed Moy, has observed, “Gold is the undisputed king of longevity for being in use since the dawn of civilization.”

What’s more, gold is a tangible asset that routinely serves as a safe haven for investors fleeing the negative effects of equities markets and a declining dollar. Central banks store physical gold to hedge their inventory of world-reserve currency (dollars) and the devaluation of their home currencies. Because of gold’s limited above-ground supplies, investors can feel reasonably confident their own stash of physical gold will hold its value and stabilize their portfolios.

If gold represents a balanced portfolio’s stabilizer, bitcoin can serve as its primary growth additive. The new electronic currency, bitcoin, has ranged in value (in dollars) from zero to $1,230.00 and is currently around $416.00. Target, Subway, Paypal, Amazon, Victoria’s Secret and Zappos are just a few of the many businesses that now accept bitcoin. The cryptocurrency stands only to grow in value as its circulation base expands. As such, it represents a splendid opportunity for robust growth in a balanced portfolio.

The question remains why invest in bitcoin, and why not invest in momentum stocks or even value stocks for rapid growth? There are several reasons – mainly having to do with the current challenges of publicly owned stocks.

According to a recent poll by FactSet, analysts anticipate first-quarter earnings per share in the S&P 500 will decline by 8.7 %. If they’re right, this will be the fourth consecutive quarter of a decline in earnings. This decline would also mark the first such four-in-a-row series of declines since the 2008-2009 financial crisis.

Clearly, if S&P stocks are this vulnerable to decline, momentum stocks – smaller speculative stocks – will be even more vulnerable.

Also, many of the stock purchases we’re now seeing are originating from company stock buybacks. This kind of stock purchase, if handled in sufficient quantity, can reduce the number of outstanding shares and make a stock appear more attractive to outside investors.

If you happen to know someone in a company and have intimate knowledge of its markets, as an investor, you might have a leg up. But lacking such knowledge, you’d best steer clear of a momentum – or so-called “hot stock” – in the current market environment.

For an alternative approach to a balanced portfolio, then, you might want to consider a mix of bitcoin and physical gold. Bitcoin represents a new form of investment. So be sure to use your own tolerance for risk and your available resources as guidelines to the respective percentages of gold vs. bitcoin you choose to invest.

Bitcoin – the Elegant New Alternative to Money

Posted on February 1, 2016 | by [email protected] | Leave a Comment

What is this strange new object called “bitcoin,” anyway? Many feel stymied, even intimidated, by the possibility of buying a thing or a service without reaching into their pockets for the familiar green and white printed paper buried in their wallets or stuffed into their handbags. Others still are suspicious of initiating a click on their computers without the inevitable follow-up act of volunteering sensitive personal credit card information.

But once you come to appreciate how bitcoin enables you to bypass the banking system and any intermediary altogether, you’ll feel only too happy to embrace a commercial transaction without using traditional money or plastic.

The fundamental way all of us can become more comfortable with bitcoin is to rethink the idea of money and currency altogether. What is money and what is currency, after all? In his positively reviewed 2013 book, Money,TheUnauthorized Biography — From Coinage to Cryptocurrencies http://www.amazon.com/Money-Unauthorized-Biography-From-Coinage-Cryptocurrencies/dp/0345803558, former World Bank official, Felix Martin, provides us with an alternative definition to the traditional definition of money we’ve come to accept without examination or question:

“Coins and currency … are useful tokens to record the underlying system of credit accounts and to implement the underlying process of clearing….But currency is not itself money. Money is the system of credit accounts and their clearing that currency represents.

…The vast majority of our national money – around 90 per cent in the U.S., for example, and 97 per cent in the UK – has no physical existence at all. It consists merely of our account balances at our banks. The only tangible apparatus employed in most monetary payments today is a plastic card and a keypad.”

There you have it – money is not truly a physical object, per se, but rather “the system of credit accounts and their clearing.”

Once you read through the exhaustive history he cites, and give the matter some thought, you’ll realize Martin’s analysis is unassailable. You’ll realize too that former U.S. Mint Director, Ed Moy, nails the essence of bitcoin when he writes:

“…The physical form of money has evolved from commodities to precious metal, to coins and paper bills and to electronic representations. Digital currency is just the next step in the development arc of money http://www.newsmax.com/Finance/Ed-Moy/cryptocurrencies-bitcoin-book-money/2015/05/29/id/647430/.”

And if we actually do rethink the definition of money, we canappreciate what Felix Martin means when he refers to money as “social technology,” and what writers about digital currency mean when they report how the bitcoin system works through “peer-to-peer technology.” They give a whole new meaning to the time-honored maxim “money talks.” Indeed it does – but in a more universal language.