Letitia James, New York's Attorney General, has asked Congress to prohibit crypto investments in retirement accounts. She stressed that hardworking Americans shouldn't have to worry about losing their retirement savings due to unsteady assets such as cryptocurrencies.
NYAG Letitia James urges Congress to ban crypto investments in retirement accounts
Letitia James, the New York Attorney General, announced Tuesday that she had "urged congressional leaders" to pass legislation prohibiting retirement funds from investing in digital assets such as digital coins, digital tokens, and cryptocurrencies.
James wrote the following in a letter she sent Tuesday to Sen. Ron Wyden, Sen. Mike Crapo (R–ID), Rep. Richard Neal and Rep. Kevin Brady.
For the benefit of New Yorkers, I am urging Congress to adopt legislation that would designate digital assets, e.g. digital coins and digital tokens, as assets that can't be bought using funds in Individual Retirement accounts (IRAs) or defined contribution plans such as 401(k), 457 plans and 457 plans.
James outlined a few reasons why cryptocurrencies should not be permitted in retirement plans. She stated that cryptocurrencies have no intrinsic value and are "often used as a tool for fraud and criminality."
The attorney general also mentioned the terra crash, FTX meltdown and subsequent crypto market sell-offs. FTX, a crypto exchange, filed for bankruptcy in November amid allegations that it had mishandled customer funds.
Attorney General James cited "recent crypto-market crashes and other market turmoil":
The risk of losing a lifetime's worth work by investing in crashing cryptocurrency could be disastrous for Americans' retirement savings.
"We have repeatedly seen the dangers of cryptocurrencies as well as the wild swings in these funds. The attorney general stated that Americans who work hard should not be worried about losing their retirement savings to unsteady assets such as cryptocurrencies.
James asks lawmakers to reject two bills that would allow cryptocurrency investments in retirement accounts. She wrote:
I appeal to Congress to reject the Retirement Savings Modernization Act… as well as the Financial Freedom Act of 2022.
James explained that the Retirement Savings Modernization Act would allow fiduciaries of 401(k), plans to make digital assets available for investment.
The Financial Freedom Act of 2022 would "prohibit Secretary of Labor from restricting or prohibiting investment options offered through a self directed brokerage window, i.e. the Secretary of Labor wouldn't be able to prohibit investments into digital assets," stated the NY attorney general.
Fidelity Investments (the largest 401(k), by assets), began offering bitcoin investments for retirement accounts this autumn. The U.S. Department of Labor has been troubled by this. Janet Yellen, Treasury Secretary, has warned crypto is "very dangerous" and stated that it is not suitable for most retirement savers. Three U.S. senators wrote to Fidelity CEO Abigail Johnson this week to urge her to discontinue offering bitcoin as a retirement account option.
What do you think of Letitia James, New York Attorney General, urging Congress to ban crypto investments in retirement funds? Comment below to let us know your thoughts.
Frequently Asked Questions
Can I keep physical gold in an IRA?
Not only is gold paper currency, but it's also money. It's an asset that people have used for thousands of years as a store of value, a way to keep wealth safe from inflation and economic uncertainty. Today, investors use gold as part of a diversified portfolio because gold tends to do better during financial turmoil.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. It's not guaranteed that you'll make any money investing gold, but there are several reasons it might be worthwhile to add gold to retirement funds.
Another reason is that gold has historically outperformed other assets in financial panic periods. The S&P 500 dropped 21 percent in the same time period, while gold prices rose by nearly 100 percent between August 2011-early 2013. During those turbulent market conditions, gold was among the few assets that outperformed stocks.
The best thing about gold investing is the fact that there's virtually no counterparty risk. If your stock portfolio goes down, you still own your shares. But if you own gold, its value will increase even if the company you invested in defaults on its debt.
Finally, gold is liquid. This allows you to sell your gold whenever you want, unlike many other investments. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you to profit from short-term fluctuations on the gold market.
Is it a good idea to open a Precious Metal IRA
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. There is no way to recover money that you have invested in precious metals. This includes losing all your investments due to theft, fire, flood, etc.
This type of loss can be avoided by investing in physical silver and gold coins. These items are timeless and have a lifetime value. They are likely to fetch more today than the price you paid for them in their original form.
Choose a reputable company with competitive rates and quality products if you are looking to open an IRA. It's also wise to consider using a third-party custodian who will keep your assets safe while giving you access to them anytime.
If you decide to open an account, remember that you won't see any returns until after you retire. Keep your eyes open for the future.
What are the benefits of a gold IRA
There are many advantages to a gold IRA. It can be used to diversify portfolios and is an investment vehicle. You can control how much money is deposited into each account as well as when it's withdrawn.
You also have the option to transfer funds from other retirement plans into a IRA. This is a great way to make a smooth transition if you want to retire earlier.
The best thing is that investing in gold IRAs doesn't require any special skills. They're available at most banks and brokerage firms. Withdrawals are made automatically without having to worry about fees or penalties.
There are also drawbacks. Gold has historically been volatile. So it's essential to understand why you're investing in gold. Are you looking for growth or safety? Are you looking for growth or insurance? Only after you have this information will you make an informed decision.
You might want to buy more gold if you intend to keep your gold IRA for a long time. One ounce won't be enough to meet all your needs. You may need several ounces, depending on what you intend to do with your precious gold.
You don’t necessarily need a lot if you’re looking to sell your gold. Even one ounce is enough. But you won't be able to buy anything else with those funds.
Can I buy or sell gold from my self-directed IRA
While you can purchase gold from your self-directed IRA (or any other brokerage firm), you must first open a brokerage account such as TD Ameritrade. You can also transfer funds from an existing retirement fund.
The IRS allows individuals to contribute up to $5,500 annually ($6,500 if married and filing jointly) to a traditional IRA. Individuals can contribute as much as $1,000 per year ($2,000 if married filing jointly) to a Roth IRA.
If you do decide that you want to invest, it is a good idea to buy physical bullion and not in futures. Futures contract are financial instruments that depend on the gold price. These contracts allow you to speculate on future gold prices without actually owning it. But, physical bullion is real bars of gold or silver that you can hold in one's hand.
Statistics
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
irs.gov
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Lawful – WSJ
forbes.com
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
cftc.gov
How To
How to hold physical gold in an IRA
The easiest way to invest is to buy shares in companies that make gold. However, there are risks associated with this strategy. It isn't always possible for these companies to survive. Even if they do survive, there is still the possibility of losing money to fluctuating gold prices.
Another option is to purchase physical gold. You can either open an account with a bank, online bullion dealer, or buy gold directly from a seller you trust. This option offers the advantages of being able to purchase gold at low prices and easy access (you don’t need to deal directly with stock exchanges). It's also easier to see how much gold you've got stored. So you can see exactly what you have paid and if you missed any taxes, you will get a receipt. You are also less likely to be robbed than investing in stocks.
However, there can be some downsides. You won't be able to benefit from investment funds or interest rates offered by banks. You can't diversify your holdings, and you are stuck with the items you have bought. Finally, the taxman may ask you about where you have put your gold.
Visit BullionVault.com to find out more about gold buying in an IRA.
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By: Kevin Helms
Title: NY Attorney General Urges Congress to Ban Crypto in Retirement Accounts
Sourced From: news.bitcoin.com/ny-attorney-general-urges-congress-to-ban-crypto-in-retirement-accounts/
Published Date: Fri, 25 Nov 2022 03:30:13 +0000
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