Fees Can Make or Break Your Bitcoin IRA

Jul 23 · 6 min read

Increase Profits Without Increasing Fees

If you are investing in bitcoin, you are likely very bullish on its potential. You expect its price, and overall economic impact, to exponentially grow. More and more we see indicators of bitcoin’s staying power and road map to monumental importance.

If you want to capitalize on bitcoin’s booming momentum, a potential route you can go is to invest in it using a Self-Directed IRA. A Self-Directed IRA enables you to purchase a vast range of alternative assets with your retirement funds. Along with bitcoin and other cryptocurrencies, other examples of alternative investments include real estate, private businesses, hard money loans, precious metals, and almost anything else you can imagine. It’s a great (and legal) way to take advantage of the tax-sheltered status of an IRA, as well as diversify your retirement portfolio which could stagnate if it is solely tied up on Wall Street.

The price of bitcoin is extremely volatile, yet it has gotten to a point where a 4-digit number is the smallest you are going to see it. Many expect it to remain as a 5-digit number moving forward. As a result, it is understandable if your personal funds don’t cover a substantial investment into the leading digital asset.

This is where the Self-Directed IRA comes in. If you’re noticing the growth potential of bitcoin while dishearteningly staring at your plateaued traditional IRA, you can use a Self-Directed IRA to avoid missing out on bitcoin and, potentially, jump-start your retirement account. The freedom of self-directed retirement investing may come with risks (as all investments naturally do), but the ability to invest in whatever you are most comfortable with can be extremely empowering.

However, the vast majority of Self-Directed IRAs are held by a custodian, who handles your assets and serve as the gatekeeper for all your investments and transactions. Instead of limiting your options to strictly stocks, bonds, and mutual funds like with a traditional IRA, the SD IRA custodian’s job is simply to execute the investment that you direct them to make.

In the case of using a Self-Directed IRA for bitcoin investing, the custodian would hold the bitcoin for you, including the private keys, and buy and sell it on your behalf. Not holding the bitcoin yourself, or not being able to buy or sell it without having to go through a 3rd party, is a hurdle for most, and an uncomfortable feeling for all. There is a better option, though, in the form of a Checkbook IRA LLC, which we’ll get to shortly.

The dividends that come with believing in the value of bitcoin, and utilizing retirement funds to invest in it, can be seen particularly in the example of one extremely successful bitcoin IRA investor. A Broad Financial client, Justin (who, for obvious reasons, prefers to use an alias) became enamored with bitcoin’s potential after reading about it in March 2015. A month later, he rolled over $822,800 into a Self-Directed IRA and put it into bitcoin as well as Coinbase shares with his Broad account. That bold investment has now ballooned to a value of $15,663,000 (as of July 2019), almost 20 TIMES what he originally put in! Justin’s outlook on bitcoin’s future leads him to believe his ridiculous returns are only getting started, as shown in this chart he provided us:

Now imagine Justin was forced to pay back a percentage of his profits in monthly fees instead of a flat-rate option. The former is how many Self-Directed IRA companies operate as they offer people the ability to invest their retirement funds in bitcoin. As the value of your investment rises higher and higher, fees will rise with it and diminish your net gain. This obviously isn’t an ideal scenario.

But this is the scenario you would be looking at with many Self-Directed Bitcoin IRA offerings out there. One such leading Bitcoin IRA custodian charges a monthly fee of .05% on your portfolio, in addition to a $240 annual fee as well as a 1% fee on every transaction you make with your crypto. Every two steps forward is accompanied by a sizable step back.

The way to avoid this frustrating dance is by signing up for a Self-Directed IRA with Checkbook Control, also known as a Checkbook IRA LLC. With the Checkbook Control feature, you gain the flexibility and freedom to invest your own wealth, in real time, with no extra paperwork, no transaction fees, and very importantly, no asset-based fees or fees based on your IRA portfolio’s value or worth.

You initiate the transactions; your money is entirely in your hands.

Also, the fee structure in a Checkbook model is very straightforward. There’s a flat one-time set up fee, which in most states is just under $1,300. This number is a fee for our expertise in establishing the specialized LLC that is capable of holding retirement funds.

After that, there is only an annual custodial maintenance fee which is just north of $200. Every year, no matter how much money your bitcoin investment has made, you only pay $208 in fees. All the other rewards you’re reaping from a potential explosion of bitcoin stays with you.

Let’s take a look at the fees you would pay with both types of plans. In the below charts, you’ll see how fees increase based on the potential future price of bitcoin. We have models based on if you own 1 bitcoin, 5, or 10:

What Makes Broad Financial’s Bitcoin IRA the Best?

Simply put, our plan is fundamentally different than others. Our fees are flat, we have no minimum and you can buy any cryptocurrency! The reason for these unique advantages is that we’re not a broker; we’re not holding your money. We’re simply creating a legal vehicle for you to take your money to an exchange (or exchanges) of your choice.

Your bitcoin would be your bitcoin; we’re happy to see it entirely in your possession.

Also, perhaps bitcoin isn’t your crypto-of-choice. Maybe you’re looking to cash in on some of the lesser-known coins before they jump in price. With Broad, there are no restrictions on which altcoins you can invest in. On the other hand, some of the Self-Directed IRA custodians out there limit the selection of coins available to invest in.

Having the wrong Self-Directed IRA for your bitcoin investments could be the difference between great success and great regrets. Don’t believe me? Read this Redditor’s breakdown of his decision-making process when choosing between Broad Financial and a competitor. Additionally, you can heed the advice of Mark Richardson, a Broad Financial client and bitcoin investor, who emphasizes the importance of identifying the most cost-effective option:

“Finding Broad earlier would have saved me many thousands of dollars, because not only was there an upfront fee (with the other company) that was between 10 and 20%, there was also a monthly fee. So it was very expensive and I couldn’t go in and buy and sell either which was very restrictive. They took a little of my crypto every month for their monthly service fee. Finding Broad Financial was great because, even though I wish I found it originally, it was easy to set up, the help I found was really great, and I could be more self-directed.”

- Mark: Client since 2016

Aside from keeping more of your money in your possession instead of your custodian’s, the customer service quality is an underrated aspect that should always be factored in. Mark’s satisfaction with Broad Financial on top of the lack of obscene monthly fees only made it that much more appealing to him.

When it comes to your Bitcoin IRA, it is paramount to not settle for anything less than the best. This is the investment that could set your family up for generations to come. The decision in the present of which company to use, however, can make all the difference.


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Our Self-Directed IRAs and Solo 401(k)s allow you to invest in what you want on a schedule that works for you. Finally, your retirement is back in your hands.

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