If you’d like to learn more about how you can hold Bitcoin in your retirement portfolio, book a call with one of our Swan IRA specialists today.
With a Roth IRA, you contribute after-tax dollars, your bitcoin grows tax-free, and you can generally make tax- and penalty-free withdrawals after age 59½. You can make direct contributions to a Roth IRA if your income is lower than $153,000 for single tax filers and lower than $228,000 for those married, filing jointly.
If your income is higher than the Roth contribution limits, a common strategy for high-earners is the backdoor Roth IRA. You can contribute to a Traditional IRA and then transfer the funds to a Roth IRA via a Roth Conversion. Please note that Roth Conversions may incur taxable events so we recommend speaking with a tax consultant before initiating it. To learn more about Roth Conversions, you can go to this article:
What is the Roth Conversion Process?
With a Traditional IRA, you contribute pre- or after-tax dollars, your bitcoin grows tax-deferred, and withdrawals are taxed as current income after age 59½. Annual contribution limits for both Traditional and Roth IRAs are $6,500 a year if you're under 50, or $7,500 if you're 50 or older. In 2024, the annual contribution limit for both Roth and traditional IRAs rises to $7,000 for those under 50, and $8,000 for those 50 and above.