How do you roll over a 401(k) to a crypto IRA?
To roll over a 401k to a crypto IRA, open the crypto IRA first, then have your old plan pay the money directly into it. If you want someone to walk you through it, a retirement specialist can help. With a direct rollover, your plan sends the money straight to the IRA and nothing is withheld, but moving pre-tax money into a Roth IRA still creates tax this year. If the plan sends the money to you first, it has to withhold 20% for federal tax, and you then have 60 days to get the full amount, including that 20%, into the IRA or owe tax on what is missing.
Moving a 401(k) into a self-directed IRA
With a self-directed IRA, you choose investments past the standard funds, including coins. A custodian holds it. That is the firm that legally keeps the assets and maintains the records. Your coins must sit with a custodian that permits crypto.
- Pick a crypto IRA custodian that takes 401(k) rollovers.
- Set up the new IRA so your old plan has somewhere to send the money.
- Request a direct rollover from your old plan. The plan then pays the new custodian directly, so nothing is withheld.
- After the funds land, purchase the coins you want within the IRA.
There is also the indirect route. The plan pays you, and you get 60 days to move the whole amount into an IRA, even adding back the 20% that was withheld. Whatever you keep out becomes taxable income, and the IRS can add a 10% early-withdrawal charge on top.
Here is how the money can shrink. Say you are 45 and take out $20,000 while in the 22% federal bracket with a 5% state tax. You would end up with roughly $12,600. A direct rollover moves the full $20,000 into the IRA without withholding.
Not sure which route fits the plan you left behind? Call and a retirement specialist will go through your options with you.
Does Capitalize handle 401(k) rollovers?
Capitalize tracks down old 401(k)s and brings them together for free. That is useful when an old plan is hard to track and you want everything together.
Crypto IRA rollover costs by custodian
Every provider listed here takes 401(k) rollovers. The figures are in dollars: a one-time cost to buy coins using your full balance, followed by an annual account fee when you are not trading.
| Custodian | Cost at $10,000: purchase / yearly | Cost at $50,000: purchase / yearly |
|---|---|---|
| Fidelity Crypto IRA | $100 / $0 | $500 / $0 |
| iTrustCapital | $100 / $0 | $500 / $0 |
| Coin IRA | $125 / $0 | $625 / $0 |
| IRA Financial | $100 / $100 | $500 / $100 |
| Public (Alto CryptoIRA) | $125 / $60 | $625 / $300 |
| Choice | $149 / $240 | $745 / $500 |
| Swan | $100 / $240 | $500 / $240 |
| Unchained | $150 / $250 | $750 / $250 |
| BitcoinIRA | $200 / $240 | $1,000 / $480 |
When you eventually sell your coins, there is a charge for that too, often around 1% to 2% of what you sell. According to Unchained, rollovers from employer plans take about two weeks. It also sets a $2,000 trading minimum on every rollover.
No custodian pays us, so we have no reason to steer you. Call to go over it with a retirement specialist, then decide what to do next.
Common questions
Is a 401(k)-to-crypto move possible at my current job?
A plan from your current employer can reach a crypto IRA only through an in-service rollover, and only when the plan permits it. Funds from a former employer's plan can be rolled over whenever you choose.
Are multiple rollovers allowed in one year?
They are. The once-a-year rollover limit covers only IRA-to-IRA rollovers. It does not touch plan-to-IRA rollovers or money moved straight between custodians.
What happens with a Roth crypto IRA?
Putting pre-tax money into a Roth creates tax in the current year. Take $30,000 at a 22% rate and that comes to roughly $6,600 owed to the IRS now. To withdraw from a Roth IRA tax-free later, you generally need the 5-year rule and to be at least 59½, with exceptions for disability, buying a first home, or death.
Who can I talk to about my rollover?
Call and a retirement specialist will talk you through crypto in your 401(k), a rollover to a crypto IRA, or a solo 401(k). The call is information about your own options, and you decide what to do next.
Crypto IRA custodians that take 401(k) rollovers
| Custodian | Buying | Yearly fee | Rollovers |
|---|---|---|---|
| iTrustCapital | 1% of each buy | $0 | Yes: rollovers from old 401(k) plans |
| Public (Alto CryptoIRA) | at least 1.25% of each buy | 0.05% a month | Yes |
| BitcoinIRA | 2% of each buy | 0.08% a month, at least $20 a month | Yes |
| Coin IRA | 1.25% of each buy | $0 | Yes: 401(k) and 403(b) rollovers |
| Choice | 1.49% down to 1% by trade size | 0.0833% a month, at least $20 a month | Yes: old 401(k) rollovers |
| Swan | 1% of each buy | 0.02% a month, at least $20 a month | Yes: old 401(k) and 403(b) rollovers |
| Unchained | 1.5% of each buy | $250 a year | Yes: employer plan rollovers take about two weeks |
| Fidelity Crypto IRA | 1% of each buy | $0 | Yes: a Crypto Rollover IRA |
| IRA Financial | 1% of each buy | $100 a year | Yes |
Dollars at your balance: crypto IRAs compared.