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 which would allow crypto investments into 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
Is gold a good investment IRA option?
If you are looking for a way to save money, gold is a great investment. It is also an excellent way to diversify you portfolio. There is much more to gold than meets your eye.
It has been used throughout history as currency and it is still a very popular method of payment. It is sometimes called the “oldest currency in the world”.
But gold is mined from the earth, unlike paper currencies that governments create. It's hard to find and very rare, making it extremely valuable.
The supply and demand factors determine how much gold is worth. The strength of the economy means people spend more, and so, there is less demand for gold. The result is that gold's value increases.
The flip side is that people tend to save money when the economy slows. This results in more gold being produced, which drives down its value.
This is why investing in gold makes sense for individuals and businesses. You will benefit from economic growth if you invest in gold.
Also, your investments will earn you interest which can help increase your wealth. In addition, you won’t lose any money if gold falls in value.
What precious metals can you invest in for retirement?
It is gold and silver that are the best precious metal investment. Both can be easily bought and sold, and have been around since forever. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: The oldest form of currency known to man is gold. It is also extremely safe and stable. This makes it a good option to preserve wealth in uncertain times.
Silver: Silver is a popular investment choice. It's an ideal choice for those who prefer to avoid volatility. Silver tends to move up, not down, unlike gold.
Platinium is another precious metal that is becoming increasingly popular. It's like silver or gold in that it is durable and resistant to corrosion. However, it's much more expensive than either of its counterparts.
Rhodium: The catalytic converters use Rhodium. It is also used in jewelry-making. It is relatively affordable when compared to other types.
Palladium: Palladium, which is a form of platinum, is less common than platinum. It's also more affordable. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
How is gold taxed within an IRA?
The tax on the sale of gold is based on its fair market value when sold. You don't pay taxes when you buy gold. It isn't considered income. If you sell it after the purchase, you will get a tax-deductible gain if you increase the price.
As collateral for loans, gold is possible. Lenders try to maximize the return on loans that you take against your assets. In the case of gold, this usually means selling it. The lender might not do this. They may just keep it. Or, they may decide to resell the item themselves. Either way you will lose potential profit.
So to avoid losing money, you should only lend against your gold if you plan to use it as collateral. If you don't plan to use it as collateral, it is better to let it be.
How much gold do you need in your portfolio?
The amount you make will depend on the amount of capital you have. You can start small by investing $5k-10k. As you grow, you can move into an office and rent out desks. This way, you don't have to worry about paying rent all at once. Rent is only paid per month.
It is also important to decide what kind of business you want to run. My website design company charges clients $1000-2000 per month depending on the order. Consider how much you expect to make from each client, if you decide to do this kinda thing.
Because freelance work pays freelancers, you won't likely get a monthly income if you do freelance work. You might get paid only once every six months.
You need to determine what kind or income you want before you decide how much of it you will need.
I suggest starting with $1k-2k gold and building from there.
Should You Buy or Sell Gold?
Gold was once considered an investment safe haven during times of economic crisis. However, today many people are turning away from traditional investments such as stocks and bonds and instead looking toward precious metals such as gold.
While gold prices have been rising in recent years they are still low relative to other commodities, such as silver and oil.
Some experts think that this could change in the near future. They say that gold prices could rise dramatically with another global financial crisis.
They also mention that gold is becoming more popular due to its perceived worth and potential return.
Here are some things to consider if you're considering investing in gold.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. It's possible to save for retirement without putting your savings into gold. Gold does offer an extra layer of protection for those who reach retirement age.
- Second, ensure you fully understand the risks involved in buying gold. Each account offers different levels of security and flexibility.
- Don't forget that gold does not offer the same safety level as a bank accounts. If you lose your gold coins, you may never recover them.
Don't buy gold unless you have done your research. And if you already own gold, ensure you're doing everything possible to protect it.
Statistics
- 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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
External Links
finance.yahoo.com
irs.gov
bbb.org
investopedia.com
How To
Gold IRAs are a growing trend
As investors look for ways to diversify their portfolios and protect themselves against inflation, the gold IRA trend is on the rise.
The gold IRA allows owners to invest in physical gold bullion and bars. It is a tax-free investment that can be used to grow wealth and offers an alternative investment option to those who are concerned about stocks or bonds.
Investors can have confidence in their investments and avoid market volatility with a gold IRA. Investors can protect themselves from inflation and other possible problems by using the gold IRA.
Investors also enjoy the benefits of owning physical gold, which includes its unique properties such as durability, portability, and divisibility.
The gold IRA also offers many other benefits, such as the ability to quickly transfer the ownership of the gold to heirs, and the fact the IRS doesn't consider gold a currency.
This means that investors who are looking for financial safety and security are becoming more interested in the gold 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
