In a standard retirement account, your investments are typically limited to stocks, bonds and money market funds.
“If you walk into Fidelity and say, ‘Put bitcoin into my IRA, they’ll say, ‘Get lost’,” Slott said.
So if you want to invest your retirement savings in cryptocurrencies, you’ll need what’s known as a “self-directed” account, which you can fill with almost anything (prohibited investments include life insurance, collectibles and personal property).
(You can, of course, keep your other retirement accounts and only pursue the self-directed option for your cryptocurrency investments).
There are custodians now — like Kingdom Trust in Murray, Kentucky — that will manage your self-directed account and allow for digital currencies to be among your alternative investments.
Just know it will cost you.
“There’s a litany of fees because they know you can’t get it anywhere else,” Slott said.
Kingdom Trust, for example, charges a monthly $20 account fee as well as a 0.07 percent holding fee, on your account balance. There are additional fees, including an opening and asset purchase charge, as well as a $100 fee to transfer out funds.
By comparison, many traditional IRA accounts come with no annual or opening fee. They do often charge small transaction fees when you buy or sell an investment (Fidelity’s fee, for example, is $4.95). There can be other fees on your investments, including underwriting and low balance charges, as well as fees the underlying mutual funds assess, that you should check for.