Many Americans are familiar with the concept of an individual retirement account or IRA because that is how they save for their retirement years when they will stop working. The difference between a simple bank savings account and an IRA is that the interest on an IRA is either tax-deferred or tax-free, while a savings account may be taxed by the US government. For this reason alone, it may be attractive to save through an IRA because the growth is faster and bigger compared to just savings.
You may have heard that you may buy Ripple for an IRA. It’s a good idea to find out first what the term Ripple refers to.
Deciphering the Ripple of an IRA
The Ripple referred to in an IRA actually means the digital currency called Ripple (similar to Bitcoin). So an IRA with Ripple pertains to being able to save in an IRA using proceeds from the Ripple digital currency (as opposed to purchasing mutual funds, bonds or stocks). Some may describe this Ripple digital currency or cryptocurrency as Ripple token or Ripple coin or even simply as XRP.
Ripple as a cryptocurrency works by mimicking traditional currencies in that it has financial value. The big difference is that with traditional currencies (like the US dollar) you have paper bills and metal coins that can be handled in real-time. The Ripple cryptocurrency only exists in the digital world and is in an encrypted form. This makes it very secure and nearly impossible to duplicate so that it can be safely traded through digital transactions between people or organizations. The other big difference between traditional currencies and cryptocurrencies like Ripple is that traditional currencies are regulated by governments (through their central banks) while cryptocurrencies are not regulated by any government.
So if you are American and want to save in an IRA, you can actually trade with Ripple cryptocurrency and put your profits within your IRA. That’s how it works.
The term Ripple is also used to refer to the Ripple network which relies on a secure money transfer system for cryptocurrency transactions around the world. Ripple could also mean the technology used in this secure money transfer system as well as the company called Ripple that conducts such transactions.
(As you can see, it is important to be sure what you are talking about when you talk about Ripple. These definitions are all interconnected because they are all related to the Ripple cryptocurrency.)
Yes, You Can Buy Ripple for IRA
The answer then is that yes, it is possible to purchase Ripple to put proceeds in an IRA. Ripple transactions are usually done between financial institutions like banks. So this may seem attractive because financial institutions need to be cautious with how they invest investor funds meaning Ripple transactions are generally safe. Ripple transactions are also quite fast, measured in seconds. This means you would need to have different buying and storage options if you intend to trade in Ripple currency.
On the other hand, you may be looking at IRAs simply as traditional portfolios where you put money in and it earns money for you. The value of an IRA is that you get to save as much as you can so that your interest will be at maximum also. You then are able to build your retirement fund year on year by continuing to put money into your IRA regularly. It can be safely said then that a Ripple IRA tends to be a safe investment for you.
Possible Setbacks in Ripple Trade
One reason people may be asking questions about Ripple IRA is that it is a new field of investment where not many people have substantial experience yet. The biggest setback you could face in Ripple trades is that you lose the value of your Ripple cryptocurrency because you traded in a non-profitable transaction. This simply means, for example, that you bought your Ripple cryptocurrency for one dollar each but sold it at 50 cents each – so you lost 50 cents in that deal.
Possible Benefits in Ripple Trade
There are two known benefits of investing in a Ripple IRA account. They are:
- Being able to earn money in a tax-deferred system when you trade in Ripple currency or even when you hold on to your Ripple currency investment for the long term. (By tax-deferred, it means that your IRA won’t be taxed by the US government yet for an investment sourced from your Ripple transaction until some time later).
- Bypass more risky IRA investments such as traditional stocks which tend to fluctuate in value over time
Don’t Discard Traditional Investments
Knowing these, you don’t have to go the whole hog and throw away other investment options altogether, in favor of Ripple IRAs. Investors still have the option of investing in both traditional investments (such as stocks, mutual funds, and bonds) and in Ripple IRA at the same time. The point though is that you should analyze your investment prospects well so that you make the most of each.
Many employed Americans want to set up their own traditional IRA retirement accounts because they want to prepare for their retirement. So consider putting up your own Ripple IRA now while the Ripple currency is in its fledgling stage. That way, you can take advantage of the low price of Ripple cryptocurrency then invest Ripple transaction proceeds in that IRA. It all depends on your appetite for risk since some people like more risk in their investments to reap the most benefits from the opportunity.
Ripple transactions are quite fast, lasting in seconds, so you really need to pay attention when trading in Ripple currency. Despite the speed and risk, you can definitely benefit from Ripple trade so that your Ripple IRA will grow in volume and value for the long term.
Featured image: cryptopress.news