The Advantages of a Split-Account Retirement Strategy

Here’s a realistic illustration of how someone might use both a traditional and crypto IRA in tandem, reflecting many principles from Two Buckets, One Plan: Coordinating a Traditional IRA and a Crypto IRA.

Profile:

  • Mark is 45, with $400,000 in a Traditional IRA invested in stocks, bonds, and index funds.

  • He wants exposure to Bitcoin without jeopardizing his core portfolio.

Step 1: Decide the Bucket Split
Mark allocates 85% to his Traditional IRA and dedicates 15% of his net portfolio to a Crypto IRA. He defines that ratio as his strategic mix.

Step 2: Pick Custodians
He keeps his Traditional IRA with his current custodian and opens a self-directed crypto IRA at a specialized provider. He ensures both have compatible reporting so he can consolidate performance views.

Step 3: Initial Funding & Purchase
Mark moves $60,000 into the Crypto IRA and acquires several cryptocurrencies. He documents valuations and ensures compliance with custody rules. All of these steps mirror those described in the linked guide.

Step 4: Rebalancing Rules
He sets a ±5% tolerance band. If crypto drifts above 20%, he sells down into the Traditional IRA; if it falls below 10%, he shifts additional funds. Rebalancing is constrained by transfer windows and costs, which the guide addresses.

Step 5: Monitoring & Adjusting
Mark reviews both buckets quarterly. As crypto volatility normalizes or life events shift, he considers adjusting target allocation. He also stays alert for tax rules, RMD changes, or custodian policy updates.

This practical structure exemplifies how two IRAs can be harmonized rather than competing. For a deeper foundation, see “Two Buckets, One Plan: Coordinating a Traditional IRA and a Crypto IRA”, where many such case studies are laid out.