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.
"Over and again, we have seen both the dangers and pitfalls associated with cryptocurrencies and the volatility of 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 store my gold IRA in my home?
An online brokerage account is the best option to protect your investment funds. You can access all of the same investment options that you would have if you worked with a traditional broker but don't need to be licensed or qualified. You don't have to pay any fees for investing.
Many online brokers also offer tools that can help you manage your portfolio. They will even let you download charts to see how your investments perform.
Are precious metal IRAs a good way to invest?
The answer depends on how much you are willing to risk an IRA account losing value. If you have $10,000 cash, they make sense as long as you don’t expect your IRA account to grow rapidly. They may not be the best investment option for you if your goal is to save money over many decades and to invest in assets with a high likelihood of increasing in value (gold). These investments can also be subject to fees that could reduce any gains.
How do I choose an IRA?
Understanding your account type is the first step to finding the best IRA. This includes whether your goal is to open a Roth IRA (or a traditional IRA). It is also important to determine how much money you have to invest.
The next step is to choose the best provider for you. Some providers offer both, while others can only provide one type of account.
Last, consider the fees associated to each option. Fees may vary from one provider to another and could include annual maintenance fees as well. Some providers charge a monthly cost based on how many shares you own. Some providers charge only once a quarter.
Statistics
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
- To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
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How To
How to Open a Precious Metal IRA
Precious Metals are one of today's most desired investment vehicles. Precious metals are a popular investment option because they provide investors with higher returns than traditional bonds and stocks. However, precious metals investing requires careful planning and research. Here are the basics to help you open your precious metal IRA account.
There are two types of precious metal accounts. They are paper gold and silver certificates (GSCs) and physical precious metals accounts. Each type comes with its own set of advantages and disadvantages. GSCs offer easy access and trade, while physical precious metals accounts provide diversification benefits. Continue reading to learn more about each of these options.
Physical precious metals accounts consist of coins, bars, and bullion. While this option provides diversification benefits, it also comes with some drawbacks. You will need to pay a lot of money for precious metals, whether you are buying, selling, or storing them. Their large size makes it difficult to transport them between locations.
The silver and paper gold certificates are also relatively affordable. They can also be traded online and are easily accessible. These make them ideal for people who don’t want to invest directly in precious metals. They aren’t as diversifiable as their physical counterparts. These assets are also supported by government agencies, such as the U.S. Mint. Inflation rates could cause their value to drop.
You should choose the account that best suits your financial needs before you open a precious-metal IRA. Before doing so, consider the following factors:
- Your risk tolerance level
- Your preferred asset allocation strategy
- What time do you have available to invest?
- No matter if you intend to use the funds in short-term trading.
- Which tax treatment would you prefer?
- Which precious metal(s) you'd like to invest in
- How liquid do you need your portfolio to be
- Your retirement age
- Where you will store precious metals
- Your income level
- Current savings rate
- Your future goals
- Your net worth
- Special circumstances that may influence your decision
- Your overall financial position
- You choose between paper and tangible assets
- Your willingness to accept risks
- Your ability manage losses
- Your budget constraints
- Financial independence is your goal
- Your investment experience
- Your familiarity and knowledge of precious metals
- Your knowledge about precious metals
- Your confidence in the economy
- Your personal preferences
Once you've chosen the right type of precious Metal IRA to suit your needs, it is time to open a dealer account. These dealers can be found via referrals, word-of-mouth, and online research.
Once you've opened your precious metal IRA, you'll need to determine how much money you want to put into it. Each precious metal IRA account requires a minimum initial deposit. Some account require just $100, while some allow you to put up to $50,000.
As you can see, your precious metal IRA IRA investment amount is completely up to the individual. If you're looking to build wealth over a long period, you should probably opt for a larger initial deposit. If you are planning to invest small amounts each month, a lower initial investment might be better.
You can purchase a variety of investments, regardless of whether the precious metals are actually used in your IRA. These are the most commonly used:
- Gold – Bullion bars, rounds, and coins
- Silver – Rounds, and coins
- Platinum – Coins
- Palladium – Round and bar forms
- Mercury – Round and bar forms
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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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