Adam Bergman is the founder of IRA Financial. He recently joined the Bitcoin.com News Podcast to talk about how every American can invest in bitcoin for tax free gains with a self-directed retirement account:
Use promo code BITCOIN to waive the $100 annual fee on your IRAfi Crypto account.
In this podcast episode, Adam Bergman, founder of IRA Financial, takes listeners on his personal journey into the world of cryptocurrency, beginning in 2014 when a client’s request to buy bitcoin with their IRA sparked his initial interest. Despite limited prior knowledge and advice from a financial advisor against it, Bergman began investing in and holding bitcoin himself, a strategy he has maintained since. This personal experience underpins his strong advocacy for self-directed retirement accounts as a gateway to alternative investments.
Bergman delves into the intricacies of self-directed IRAs, explaining how they empower individuals to invest retirement funds in a diverse range of assets beyond traditional stocks and mutual funds, including real estate, gold, and crucially, bitcoin. He highlights that these accounts, established in 1974, offer significant tax advantages, such as deductions on contributions and tax-free growth of investments until retirement. A key takeaway is the power of compounding returns, particularly with an asset like bitcoin, where gains can grow entirely tax-free within the IRA structure.
A central theme of the discussion is the distinct advantages of a Roth IRA for crypto investment. Bergman clarifies that while contributions are made with after-tax money, qualified withdrawals after age 59 and a half, and five years of account operation, are completely tax-free. He passionately argues that every American should consider holding some bitcoin in a Roth IRA, seeing it as a favorable long-term risk-versus-reward proposition, even amidst market fluctuations.
The conversation also addresses practical considerations and limitations. Bergman clarifies that IRA accounts cannot be used as collateral for personal loans, and while margin can be used for buying bitcoin, it may trigger unrelated business income tax. He details the straightforward process of opening a self-directed IRA with IRA Financial, emphasizing their partnership with Bitstamp and their offering of various account types. Funds can be rolled over tax-free or contributed directly, and IRA Financial handles all necessary IRS reporting for a flat annual fee, with no “hodl” fees.
Furthermore, Bergman outlines the wide array of permitted investments within their self-directed IRA platform, contrasting it with the more restrictive options of traditional brokerages. He specifies only three prohibited investments: life insurance, collectibles, and any investment that personally benefits the IRA owner or their lineal descendants. Beyond these, clients have the freedom to invest in cryptocurrencies, real estate, private equity, venture capital, and private businesses.
Adam Bergman reiterates his strong recommendation for every American to allocate even a small amount of bitcoin to a Roth IRA. He believes bitcoin is still in its early stages with substantial upside potential, far outweighing the risks. He highlights that holding bitcoin in a Roth IRA fosters long-term saving due to withdrawal restrictions, making it an excellent strategy for building generational wealth that can be passed down tax-free. He touches upon trading strategies, confirming that most, including options and decentralized exchanges, are permissible, though using margin could trigger unrelated business income tax. He also addresses the “gray area” of tax implications for staking and airdrops.
Finally, Bergman expresses optimism about the positive regulatory environment for digital assets in the US, citing the IRS’s classification of digital assets as property, which provides tax clarity. He supports the current administration’s backing of the digital asset industry and anticipates significant future growth in digital assets like bitcoin and ethereum, driven by emerging technologies like AI. He concludes by encouraging listeners to explore IRA Financial’s resources and once again urges Americans to consider investing in bitcoin through a Roth IRA for its unique tax benefits and long-term wealth creation potential.
Adam Bergman is a leading expert in self-directed retirement investing, known for founding IRA Financial, which has grown to serve over 25,000 clients with more than $5 billion in assets. With a background as a tax attorney, his deep knowledge of tax law and retirement regulations positioned him to pioneer strategies in the underutilized self-directed IRA space. A prolific author and speaker, Adam has written nine books and been featured in major media outlets, offering valuable insights on tax-advantaged investing and retirement planning.
To learn more about the service visit IRAFinancial.com, and follow Adam on YouTube.
Use promo code BITCOIN to waive the $100 annual fee on your IRAfi Crypto account.
The Bitcoin.com News podcast features interviews with the most interesting leaders, founders and investors in the world of Cryptocurrency, Decentralized Finance (DeFi), NFTs and the Metaverse. Follow us on iTunes or Spotify.
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