Mar
06
2023
Investing in Transportation Stocks and ETFs
Do you want to invest in transportation stocks or a transportation ETF? Here’s everything you need to know to get started investing in transportation.
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SoFi
Student Loan Consolidation and Refinancing
Mar
01
2023
Bitcoin Price History: 2009 – 2023
With Bitcoin’s price holding steady above the $20,000 mark for most of early 2023, there are hopes that the crypto winter of 2022 is thawing, and that BTC — as well as crypto prices in general — may recover some lost ground.
Bitcoin’s price has been on a wild ride since it launched over 14 years ago, on January 3, 2009. While that’s similar to most cryptocurrencies, BTC has been particularly volatile owing to the price surges of 2021, quickly followed by the dramatic declines during the so-called crypto winter of 2022.
In other words, those who bought Bitcoin (BTC) early and held onto it have typically seen phenomenal returns, but the fluctuations in Bitcoin’s price — as with all forms of crypto — have also led to considerable losses.
For crypto fans and investors curious about this space, the volatile price history of the world’s oldest and most widely embraced cryptocurrency can also be viewed as a much broader saga. Bitcoin’s story reflects the rise of decentralized finance (DeFi), the emergence of blockchain technology, and countless innovations that are changing how investors think of commerce as well as what the future of crypto might hold.
Table of Contents
- Bitcoin Price History: Overview
- Bitcoin Price in 2009
- Bitcoin Price in 2011
- Bitcoin Price in 2013
- Bitcoin Price in 2014-2016
- Bitcoin Price in 2017-2019
- Bitcoin Price in 2020
- Bitcoin Price in 2021
- Bitcoin Price in 2022: Onset of the Crypto Winter
- Bitcoin Price in 2023: Hopes for a Recovery
- What Factors Affect Bitcoin’s Price?
Bitcoin Price History
While some enjoy comparing Bitcoin’s price history to past speculative manias like Beanie Babies circa 1995 (or the infamous tulip bubble circa 1636), speculation is only one factor in any given Bitcoin price fluctuation.
Over the years, a fairly reliable pattern has emerged in Bitcoin’s prices. Every four years, the network undergoes a change called “the halving,” where the supply of new BTC rewarded to Bitcoin miners gets cut in half. This has happened three times so far. The first Bitcoin halving occurred in 2012, from 50 BTC to 25 BTC, the second in 2016, from 25 to 12.5, and the third in 2020.
As of July 15, 2022, the current reward for Bitcoin mining stands at 6.25 BTC.
In each instance, the price of BTC reached new record highs in the year or so following each halving event. This was typically followed by a Bitcoin bear market. After a period of consolidation, the price then moved upwards again in anticipation of the next halving, beginning a new Bitcoin bull market.
While the price of BTC can hardly be considered predictable, it’s useful to view the chapters in the Bitcoin price history and what it may mean for investors.
Bitcoin Price History by Year
| Bitcoin Price History by Year (2014-2022) | ||
| Year | High | Low |
| 2014 | $457.09 | $289.30 |
| 2015 | $495.56 | $171.51 |
| 2016 | $979.40 | $354.91 |
| 2017 | $20,089.00 | $755.76 |
| 2018 | $17,712.40 | $3,191.30 |
| 2019 | $13,796.49 | $3,391.02 |
| 2020 | $29,244.88 | $4,106.98 |
| 2021 | $68,789.63 | $28,722.76 |
| 2022 | $48,086.84 | $15,599.05 |
| 2023 | $16,674 | $24,895 |
Source: Yahoo Finance
Bitcoin Price in 2009: The Start
Price of 1 Bitcoin in 2009: $0
On October 31, 2008, the pseudonymous person or group known as Satoshi Nakamoto published the Bitcoin white paper. This paper introduced a peer-to-peer digital cash system based on a new form of distributed ledger technology called blockchain.
Then, on January 3, 2009, the Bitcoin network went live with the mining of the genesis block, which allowed the first group of transactions to begin a blockchain. This block contained a text note that read: “Chancellor on Brink of Second Bailout for Banks.” This referenced an article in The London Times about the financial crisis of 2008 – 2009, when commercial banks received trillions in bailout money from central banks and governments. This event helped mark Bitcoin’s original price at $0.
For this reason and others, many suspect that Nakamoto created Bitcoin, at least in part, in response to the way the events of those years played out.
Bitcoin Price in 2011: The Surge Pt. 1
Price of 1 Bitcoin in 2011: $1 – $30
The Bitcoin price in 2009 was barely above zero. Real adoption of Bitcoin began to take place about two years later, and a major Bitcoin price surge happened for the first time.
In 2011, the Electronic Frontier Foundation (EFF) accepted BTC for donations for a few months, but quickly backtracked due to a lack of a legal framework for virtual currencies.
In February of 2011, BTC reached $1.00 for the first time, achieving parity with the U.S. dollar. Months later, the price of BTC reached $10 and then quickly soared to $30 on the Mt. Gox exchange. Bitcoin had risen 100x from the year’s starting price of about $0.30.
By year’s end, though, the price of Bitcoin was under $5. No one can say for sure exactly why the price behaved as it did, especially back when the technology was so new. It could be that 2011 marked the launch of Litecoin, a fork of the Bitcoin blockchain — and other forms of crypto began to emerge as well — signaling greater competition.
In 2012, of course, Bitcoin saw its first halving, from a 50-coin reward for mining BTC to 25 coins. This set the stage for its precipitous growth. But the pattern of an 80% – 90% correction from record highs would continue to repeat itself going forward, even as much more Bitcoin liquidity would come into being.
Bitcoin Price in 2013: The Decisive Year
Price of 1 Bitcoin in 2013: $13- $1,100
In 2013, the EFF began accepting Bitcoin again, and this was the strongest year in Bitcoin price history in terms of percentage gains. The cryptocurrency saw gains of 6,600%.
Starting at $13 in the beginning of the year, the price of Bitcoin rose to almost $250 in April before correcting downward over 50%. The price consolidated for about six months until another historic rally in November and December of that year, when the price peaked out at $1,100.
This bull run saw Bitcoin’s market cap exceed $1 billion for the first time ever. The world’s first Bitcoin ATM was also installed in Vancouver, allowing people to convert cash into crypto.
It would be over three years before the Bitcoin price would reach $1,000 again. The Bitcoin price in 2013 bottomed out at -85% off its record high.
Amidst this volatility was a surge in crypto interest, with Dogecoin being one of the more notable coins to emerge at that time. Though considered a meme coin, Dogecoin still exists.
Bitcoin Price in 2014 – 2016: The Fallow Period
While the cryptoverse quietly exploded in this time period, with technological innovations that permitted a move away from proof-of-work to the less onerous proof-of-stake, as well as the emergence of smart contracts, and the real foundations of decentralized finance — Bitcoin was relatively quiet.
The price held steady in the $200 to $400 range for much of this time, but began to climb with the second halving in 2016 — and quickly reached five digits within the year after the halving, peaking at nearly $20,000 in December of 2017. Let’s take a closer look.
Bitcoin Price in 2017-2019: The Surge Pt. 2
Price of 1 Bitcoin in 2017-2019: $1,100 – $20,000
The Bitcoin price in 2017 breached the $1,100 mark in January, a new record high at the time — following the Bitcoin halving in July of 2016. By December, the price had soared to nearly $20,000. That’s a 20x rise in less than 12 months, and it was followed predictably by a decline through 2018 and 2019. Bitcoin wouldn’t see the other side of $20,000 until late 2020.
Like the 2013 price surge, the 2017 rally occurred about one year after the halving. What made this time different was that for the first time ever, the general public became more aware of cryptocurrency. Mainstream news outlets began covering stories relating to Bitcoin and other cryptocurrencies. This price rise largely reflected retail investors entering the market for the first time.
Opinions on Bitcoin ranged from thinking it was a scam to believing it was the greatest thing ever. For the believers, this was an opportunity to learn how to invest in Bitcoin for the first time, but there’s little doubt that the influx of retail interest in the crypto markets contributed heavily to volatility across the board.
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Bitcoin Price in 2020: After the 3rd Halving
The crypto feeding frenzy was well underway by the end of 2019, with hundreds of new coins on the market. By January 3, 2020, Bitcoin’s price was $7,347.49 and it steadily rose as the halving in May of 2020 approached, shooting north of $9,100 that month, nearly a 25% increase in just a few months.
But that was just the start of a meteoric rise — and fall — for BTC that few will forget, and a phase of Bitcoin’s story that many tie to the pandemic. With millions of people worldwide confined at home from 2020 through 2021 (in some cases longer), online speculation became a widespread phenomenon. One offshoot of that may have been the biggest Bitcoin bull market to date.
Bitcoin Price Chart in 2021: An Epic Rise and Fall
In August 2021, the price of Bitcoin was hovering around $46,000, and by November 2021 BTC hit its all-time high of over $68,500.
Toward the end of 2021, however, the Bitcoin hash rate, a factor thought to have some correlation to the Bitcoin price, plummeted to around $47,000 — a loss of close 30%.
The price drop occurred partly as a result of China requiring its citizens to shut down Bitcoin mining operations. The country previously housed a significant portion of the network’s mining nodes. As a result, these computers had to go offline. Many believe this reduction in mining capacity was a key factor weighing on the Bitcoin price.
In addition, politicians and regulators raised concerns about the future of crypto laws and regulations, adding to the general mood that crypto mavens refer to as FUD (fear, uncertainty, doubt) — one of many crypto slang terms now in wider use.
But as 2021 shifted into 2022, the specter of inflation — in addition to the global energy crisis and geopolitical turmoil thanks to Russia’s war on Ukraine — put a drag on the price of BTC and just about every other major crypto.
Bitcoin Price in 2022: Onset of the Crypto Winter
From January 2022 through May, Bitcoin’s price continued to sag as the Crypto Winter officially took hold. By May, BTC dipped under $30,000 for the first time since July of 2021.
What Is a Crypto Winter?
Unlike a bear market, a crypto winter doesn’t have specific parameters or criteria. But, similar to a bear market, it does mark a period of steady and sometimes precipitous losses that pervade the crypto markets as a whole.
Crypto Struggles in the Face of Crises
This downward trend proved to be the case as crypto prices overall declined through Q2 — partly affected by the collapse of stablecoins like TerraUSD and Luna. In June, Bitcoin fell below $23,000.
Crypto prices struggled through Q3 of 2022, and took another hit in November 2022, thanks to the sudden failure of crypto exchange FTX.
The exchange crashed amid a liquidity crunch and allegations of misused funds by its CEO, Sam Blankman Fried. A bailout by Binance was possible, but the deal fell through because of FTX’s troubled finances and implications of fraud.
The rapid downfall of FTX shocked the financial industry, and the crash had a massive ripple effect throughout the crypto market, affecting investor confidence. Widespread worries about inflation, as well as steady interest rate hikes, affected broader markets. Bitcoin’s price continued to be a barometer of crypto health in many ways, plunging below $20,000 by the end of December, 2022.
Bitcoin in 2023: Hopes for a Steady Recovery
As of February 27, 2023, Bitcoin’s slow but steady price increase to about $23,300 sparked hopes that the crypto winter had begun to thaw, with other cryptocurrencies showing similar price patterns in Q1.
Also, Bitcoin mining has reached a new high as February draws to a close. This signals interest from miners, which some traders are taking as a bullish indicator.
Although inflation has yet to be tamed in the wider markets, there is a sense that some of the measures the Fed has taken may encourage a soft landing.
What Factors Affect Bitcoin’s Price?
Bitcoin trades constantly on many different exchanges. The price is discovered through buyers and sellers agreeing on prices at which to settle trades. It can be said that “the market” determines the price of Bitcoin.
Of course, many external factors may influence the price at which people are willing to pay for Bitcoin.
1. Sentiment
With any asset, general market sentiment can influence present and future price action. This tends to occur in cycles.
It often happens that as more and more people grow increasingly bullish on something, the price keeps rising until everyone thinks it will never go down again. Then at some point, things change, and sentiment starts shifting the other way. Once most people think the price will never go up again, that usually indicates that prices have come close to bottoming.
This is why CNN has something called the “Fear and Greed Index”. The index measures sentiment across financial markets at large using seven broad indicators. These indicators measure things like Bitcoin stock price volatility, call-to-put ratios, and the amount of stocks making new highs vs the amount of stocks making new lows.
2. Mining
Bitcoin mining also impacts the price of Bitcoin. Miners are powerful computers that process transactions for the network, and they’re the source of newly minted bitcoins.
Because miners create and accumulate new coins, what they tend to do as a whole can make a big difference in market prices. Miners have to sell Bitcoin to cover electricity and maintenance costs. But what they choose to do with their remaining coin can impact prices.
For example, when miners anticipate the future price of Bitcoin to be higher than it is right now, they could choose to hold most of their coins, reducing overall supply on exchanges. This would create support for prices.
On the other hand, if miners think the price of Bitcoin will fall, or they need cash today for some reason, they could sell their coins, increasing the supply and potentially driving prices lower.
3. Money Supply
Some may argue that the number one factor affecting the price of Bitcoin is the growth in money supply. When central banks print more money, the price of Bitcoin tends to rise in almost direct proportion to the amount of new currency created.
This is part of the supply-and-demand element in Bitcoin’s price. More and more dollars (or Euros, Yen, Pesos, etc.) wind up chasing an ever-dwindling supply of bitcoin. The new supply of fiat currency keeps growing while the new supply of bitcoin gets cut in half every 4 years (a process known as Bitcoin halving).
4. The Network Effect
Some say Bitcoin’s true value lies in the Bitcoin network. In other words, how many people are using Bitcoin.
A rough analogy would be social media networks. We tend to measure the value of a social network by its number of users and how active they are on the platform. Facebook and Instagram both have over a billion users each, with at least half of them logging in everyday in the case of Instagram. This is the main reason people think these networks have value.
With the Bitcoin evolution, the more people who create cryptocurrency wallets, convert fiat currency to Bitcoin, and spend or store those coins, the more valuable Bitcoin could become. And as the price of Bitcoin rises, more people tend to join in the network, potentially creating a positive feedback loop.
The Takeaway
As of February 27, 2023, Bitcoin seems to be regaining some of the luster it lost during the crippling crypto winter of 2022, holding fairly steady above the $20,000 mark (but far off its November 2021 peak of about $68,000).
Nonetheless, the bigger story of Bitcoin’s price history is far more impressive. As the oldest and still the largest form of crypto, BTC has gone from being worth a fraction of a penny to about $23,000 today — with a staggering range of price highs and lows in between.
If Bitcoin continues to grow at even a fraction of the rate it has over the past 14 years, the gains for long-term crypto investors would outpace that of most other asset classes. However, past performance doesn’t guarantee future results.
If you’re interested in beginning to buy and sell crypto, a great way to start is by opening an Active Invest account with SoFi Invest®. With a little as $10 you can start trading not only Bitcoin but dozens of other cryptocurrencies as well. SoFi does not offer staking or a crypto wallet. But you can trade 24/7 from SoFi’s secure platform.
Photo credit: iStock/simarik
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
2Terms and conditions apply. Earn a bonus (as described below) when you open a new SoFi Digital Assets LLC account and buy at least $50 worth of any cryptocurrency within 7 days. The offer only applies to new crypto accounts, is limited to one per person, and expires on December 31, 2023. Once conditions are met and the account is opened, you will receive your bonus within 7 days. SoFi reserves the right to change or terminate the offer at any time without notice.
First Trade Amount
Bonus Payout
Low
High
$50
$99.99
$10
$100
$499.99
$15
$500
$4,999.99
$50
$5,000+
$100
SOIN0721303
Mar
01
2023
Rollover IRA vs. Traditional IRA: What’s the Difference?
Employees leaving a job have the option of moving their retirement savings from their employer-sponsored 401(k) plan to an individual retirement account, or IRA at another financial institution. This IRA, where they transfer their 401(k) savings to, is called a rollover IRA. If the 401(k) plan was not a Roth 401(k), you’ll like want to open what’s called a traditional IRA.
In this scenario, a rollover IRA is also a traditional IRA. But they aren’t always the same. You can have a traditional IRA that is not a rollover IRA. Read on for the differences worth noting between a rollover IRA and a traditional IRA.
What Is a Traditional IRA?
To understand the difference between a rollover IRA vs. traditional IRA, it helps to know some IRA basics.
From the moment you open a traditional IRA, your contributions to the account are typically tax deductible, so your savings will grow tax-free until you make withdrawals in retirement. This is advantageous to some retirees: Upon retiring, it’s likely one might be in a lower income tax bracket than when they were employed. Given that, the money they withdraw will be taxed at a lower rate than it would have when they contributed.
What Is a Rollover IRA?
A rollover IRA is an IRA account created with money that’s being rolled over from a qualified retirement plan. Generally, rollover IRAs happen when someone leaves a job with an employer-sponsored plan, such as a 401(k) or 403(b), and they roll the assets from that plan into a rollover IRA.
In a rollover IRA, like a traditional IRA, your savings grow tax-free until you withdraw the money in retirement. There are several advantages to rolling your employer-sponsored retirement plan into an IRA, vs. into a 401(k) with a new employer:
• IRAs may charge lower fees than 401(k) providers.
• IRAs may offer more investment options than an employer-sponsored retirement account.
• You may be able to consolidate several retirement accounts into one rollover IRA, simplifying management of your investments.
• IRAs offer the ability to withdraw money early for certain eligible expenses, such as purchasing your first home or paying for higher education. In these cases, while you’ll pay income taxes on the money you withdraw, you won’t owe any early withdrawal penalty.
There are also some rollover IRA rules that may feel like disadvantages to putting your money into an IRA instead of leaving it in an employer-sponsored plan:
• While you can borrow money from your 401(k) and pay it back over time, you cannot take a loan from an IRA account.
• Certain investments that were offered in your 401(k) plan may not be available in the IRA account.
• There may be negative tax implications to rolling over company stock.
• An IRA requires that you start taking Required Minimum Distributions (RMDs) from the account at age 73, even if you’re still working, whereas you may be able to delay your RMDs from an employer-sponsored account if you’re still working.
• The money in an employer plan is protected from creditors and judgments, whereas the money in an IRA may not be, depending on your state.
A Side-by-Side Comparison of Rollover IRA vs. Traditional IRA
| Rollover IRA | Traditional IRA | |
|---|---|---|
| Source of contributions | Created by “rolling over” money from another account, most typically an employer-sponsored retirement plan, such as 401(k) or 403(b). For rollover amount, annual contribution limits do not apply. | Created by regular contributions to the account, not in excess of the annual contribution limit, although rolled-over money can also be contributed to a traditional IRA. |
| Contribution limits | There is no limit on the funds you roll over from another account. If you’re contributing outside of a rollover, the limit is $6,500 for tax year 2023 (and $6,000 for tax year 2022), plus an additional $1,000 if you’re 50 or older. | Up to $6,500 for tax year 2023 (and $6,000 for tax year 2022), plus an additional $1,000 if you’re 50 or older. |
| Withdrawal rules | Withdrawals before age 59½ are subject to both income taxes and an early withdrawal penalty (with certain exceptions , like for higher education expenses or the purchase of a first home). | Withdrawals before age 59½ are subject to both income taxes and an early withdrawal penalty (with certain exceptions , like for higher education expenses or the purchase of a first home). |
| Required minimum distributions (RMDs) | You’re required to withdraw a certain amount of money from this account each year once you reach age 73 (thanks to the SECURE 2.0 Act of 2022). | You’re required to withdraw a certain amount of money from this account each year once you reach age 73 (again, thanks to the SECURE 2.0 Act). |
| Taxes | Since contributions are from a pre-tax account, all withdrawals from this account in retirement will be taxed at ordinary income rates. | If contributions are tax deductible, all withdrawals from this account in retirement will be taxed at ordinary income rates. (If contributions were non-deductible, you’ll pay taxes on only the earnings in retirement.) |
| Future rollover options | As long as no other (non-rollover) funds have been added to the account, this money can be rolled into a future employer’s retirement plan, if the plan allows it. | The money in a traditional IRA cannot be rolled into a future employer’s retirement plan. |
| Convertible to a Roth IRA | Yes | Yes |
Is There a Difference Between a Traditional IRA and a Rollover IRA?
The money you roll over to a rollover IRA can later be rolled over into an employer-sponsored retirement plan, if the plan allows it. This is not true of money in a traditional IRA.
When it comes to a rollover IRA vs. traditional IRA, the only real difference is that the money in a rollover IRA was rolled over from an employer-sponsored retirement plan. Otherwise, the accounts share the same tax rules on withdrawals, required minimum distributions, and conversions to Roth IRAs.
💡 Here’s a complete list of retirement plans to compare.
Can You Contribute to a Rollover IRA?
You can make contributions to a rollover IRA, up to IRA contribution limits. For tax year 2023, individuals can contribute up to $6,500 (with an additional catch-up contribution of $1,000 if you’re 50 or older). If you do add money to your rollover IRA, however, you may not be able to roll the account into another employer’s retirement plan at a later date.
Can You Combine a Traditional IRA With a Rollover IRA?
A rollover IRA is essentially a traditional IRA that was created when money was rolled into it. Hence, you can combine two IRAs by having a direct transfer done from one account to another, or by rolling money from one IRA to the other IRA.
There’s one important aspect of the transfer or rollover process that will help prevent the money from counting as an early withdrawal or distribution to you—and that’s being timely with any transfers. With an indirect rollover, you typically have 60 days to deposit the money from the now-closed fund into the new one.
A few other key points to remember: As mentioned above, if you add non-rollover money to a rollover account, you may lose the ability to roll funds into a future employer’s retirement plan. Also keep in mind that there’s a limit of one rollover between IRAs in any 12-month period. This is strictly an IRA-to-IRA limit and does not apply to rollovers from a retirement plan to an IRA.
How to Open a Traditional or Rollover IRA Account
Opening a traditional IRA and a rollover IRA are identical processes—the only difference is the funding. Open a traditional or rollover IRA by doing the following:
• Decide where to open your IRA. For instance, you can choose an online brokerage firm where you can choose your own investments, or you can select a robo-advisor that will offer automated recommendations based on your answers to a few basic investing questions. (There’s a small fee associated with most robo-advisors.)
• Open an account. From the provider’s website, select the type of IRA you’d like to open—traditional or rollover, in this case—and provide a few pieces of personal information. You’ll likely need to supply your date of birth, Social Security number, and contact and employment information.
• Fund the account. You can fund the account with a direct contribution via check or a transfer from your bank account, transferring money from another IRA, or rolling over the money from an employer-sponsored retirement plan. Contact your company plan administrator for information on how to do the latter.
Is your retirement piggy bank feeling light?
Start saving today with a Roth or Traditional IRA.
The Takeaway
Both a rollover IRA and a traditional IRA allow investors to put money away for retirement in a tax-advantaged way, with very little difference between the two accounts.
One of the primary questions anyone considering a rollover IRA should consider is, will you keep contributing to it? If so, that would prevent you from rolling the rollover IRA back into an employer-sponsored retirement account in the future.
Whether it’s a rollover IRA you’ve created by rolling over an employer-sponsored retirement account or a traditional IRA you’ve opened with regular contributions, either account can play a key role in your retirement game plan.
Interested in learning more about growing your savings with an IRA? Explore IRA accounts at SoFi and read about the broad range of investment options, member services and investment tools available.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
SOIN20277
Read moreFeb
22
2023
Guide to Building an Investment Portfolio for Beginners
Investing can seem intimidating, especially for beginners who are just starting out. But building an investment portfolio is one of the best ways to grow your wealth over time.
Before you start pondering what you want to invest in and build an investment portfolio, think this through: Why am I investing? In the end, most of what matters is achieving your financial goals. And what are you saving for? By answering these questions, you can match your goals with your investment strategy — which is important if you want to give yourself a shot at your desired financial outcome.
The Basics: What Is an Investment Portfolio?
An investment portfolio is a collection of investments, such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), real estate, and other assets. An investment portfolio aims to achieve specific investment goals, such as generating income, building wealth, or preserving capital, while managing market risk and volatility.
A well-diversified investment portfolio can help investors achieve their financial objectives over the long term.
Recommended: Investing for Beginners: Considerations and Ways to Get Started
Why Building a Balanced Portfolio Matters
Building a balanced investment portfolio matters for several reasons. As noted above, a balanced, diversified portfolio can help manage the risk and volatility of the financial markets. Many people avoid building an investment portfolio because they fear the swings of the market and the potential to lose money. But by diversifying investments across different asset classes and sectors, the impact of any one investment on the overall portfolio is reduced. This beginner investment strategy can help protect the portfolio from significant losses due to the poor performance of any one investment.
Additionally, a balanced portfolio can help investors achieve their long-term investment objectives. By including a mix of different types of investments, investors can benefit from the potential returns of different asset classes while minimizing risk. For example, building a portfolio made up of relatively risky, high-growth stocks and stable government bonds may allow you to benefit from long-term price growth from the stocks while also generating stable returns from the bonds.
What Is Your Risk Tolerance?
When it comes to braving risk, everyone is different. And in life, there are no guarantees. So where does that leave you? Take your risk temperature and see which type of investing you can live (and grow) with. Below are two general strategies many investors follow depending on their risk tolerance.
Aggressive Investing
An aggressive investment strategy is for investors who want to take risks to grow their money as much as possible. High risk sometimes means big losses (but not always). The idea here is to “go for it.” Find investments that feel like they have a lot of potential to generate significant gains.
Your stock picks can ride the rollercoaster, and if you opt for an aggressive investing strategy when you’re young and just starting out, you can watch them take the ride without you doing much hand-wringing.
If it doesn’t work out, you can own the loss and move on. Downturns happen. So do bull markets. And when you’re young, you can likely afford to take risks.
Conservative Investing
Conservative investing is for investors who are leery of losing a lot of their money. It may be better suited for older investors because the closer you get to your ultimate goal, the less room you will have for big drawdowns in your portfolio should the market sell off.
You can prioritize lower-risk investments as you inch closer to retirement. Research investments with more stable and conservative returns. Lower-risk investments can include fixed-income (bonds) and money-market accounts.
These investments may not have the same return-generating potential as high-risk stocks, but often the most important goal is to not lose money.
Choosing a Goal for Your Portfolio
Long- and short-term goals depend on where you are in life. Your relationship with money and investing may change as you get older and your circumstances evolve. As this happens, it’s best to understand your goals and figure out how to meet them ahead of time.
If you’re still a beginner investing in your 20s, you’re in luck. Time is on your side, and when building an investment portfolio, you have that time to make mistakes (and correct them).
You can also potentially afford to take more risks because you’ll have more time to work on reversing losses or at least shrugging them off and moving on.
If you’re older and closer to retirement age, you can reconfigure your investments so that your risks are lower and your investments become more conservative, predictable, and less prone to significant drops in value.
As you go through life, consider creating short and long-term goal timelines. If you keep them flexible, you can always change them as needed. But of course, you’d want to check on them regularly and the big financial picture they’re helping you create.
Short Term: Starting an Emergency Fund
Before you do any serious investing, making sure you have enough money stashed away for emergencies is a good idea. Loss of income, unplanned moves, health situations, auto repairs, and all of those other surprises can tap you on the shoulder at the worst possible time — and that’s when your emergency fund comes in.
It may make sense to keep your emergency money in liquid assets for short-term expenses. Liquidity helps ensure you can get your money if and when you need it. Try to take only a few risks with emergency money because you may not have time to recover if the market experiences a severe downturn.
Long Term: Starting a Retirement Fund
Think about what age you would want to retire and how much money you would need to live on yearly. You can use a retirement calculator to get a better idea.
One of the most frequently recommended strategies for long-term retirement savings is opening a 401(k), an IRA, or both. The benefit of this type of investment account is that they have tax advantages.
Another benefit of 401(k)s and IRAs is that they help you build an investment portfolio over decades: the long term.
Prioritizing Diversification
As mentioned above, portfolio diversification means keeping your money in more than one place: think stocks, bonds, and real estate. And once you diversify into those asset classes, you’ll need to drill down and diversify again within each sector.
Understanding Systematic Risk
Big things happen, like economic uncertainty, geopolitical conflicts, and pandemics. These incidents will affect almost all businesses, industries, and economies. There are not many places to hide during these events, so they’ll likely affect your investments too.
One smart way to fight this: diversify. Spread out. High-quality bonds, like U.S. Treasuries, tend to do well in these environments and have offset some of the negative performances that stocks usually suffer during these times.
It might also be helpful to calculate your portfolio’s beta, the systemic risk that can’t be diversified away. This can be done by measuring your portfolio’s sensitivity to broader market swings.
Understanding Idiosyncratic Risk
Smaller things happen. For instance, a scandal could rock a business, or a tech disruption could make a particular business suddenly obsolete. This risk is more micro than macro; it may occur in a specific company or industry.
As a result, a stock’s value could fall, along with the strength of your investment portfolio. The best way to fight this: diversify. Spread out. If you only invest in three companies and one goes under, that’s a big risk. If you invest in 20 companies and one goes under, not so much.
Owning many different assets that act differently in various environments can help smooth your investment journey, reduce your risk, and hopefully allow you to stick with your strategy and reach your goals.
4 Steps Towards Building an Investment Portfolio
Here are four steps toward building an investment portfolio:
1. Set Your Goals
The first step to building an investment portfolio is determining your investment goals. Are you investing to build wealth for retirement, to save for a down payment on a home, or another reason? Your investment goals will determine your investment strategy.
2. What Sort of Account Do You Want?
Investors can choose several kinds of investment accounts to build wealth. The type of investment accounts that investors should open depends on their investment goals and the investments they plan to make. Here are some common investment accounts that investors may consider:
• Individual brokerage account: This is a standard brokerage account that allows investors to buy and sell stocks, bonds, mutual funds, ETFs, and other securities. This account is ideal for investors who want to manage their own investments and have the flexibility to buy and sell securities as they wish.
• Retirement accounts: These different retirement plans, such as 401(k)s, IRAs, and Roth IRAs, offer tax advantages and are specifically designed for retirement savings. They have contribution limits and may restrict when and how withdrawals can be made.
• Automated investing accounts: These accounts, also known as robo advisors, use algorithms to manage investments based on an investor’s goals and risk tolerance.
Recommended: What Is Automated Investing?
3. Choosing Investments Based on Risk Tolerance
Once you have set your investment goals, the next step is to determine your investments based on your risk tolerance. As discussed above, risk tolerance refers to the amount of risk you are willing to take with your investments. If you are comfortable with higher levels of risk, you may be able to invest in more aggressive assets, such as stocks or commodities. If you are risk-averse, you may prefer more conservative investments, such as bonds or certificates of deposit (CDs).
Recommended: How to Invest in Stocks: A Beginner’s Guide
4. Allocating Your Assets
The next step in building an investment portfolio is to choose your asset allocation. This involves deciding what percentage of your portfolio you want to allocate to different investments, such as stocks, bonds, and real estate.
Once you have built your investment portfolio, it is important to monitor it regularly and make necessary adjustments. This may include rebalancing your portfolio to ensure it remains diversified and aligned with your investment goals and risk tolerance.
Paying Off Debt First
Student loans and credit card debt may stand in the way of pumping money into your investment portfolio. Do what you can to pay off most or all of your debt, especially high-interest debt.
Get an aggressive repayment plan going. Also, remember it can be wise to pay yourself first (by that, we mean to keep a steady flow of cash flowing into your short and long-term investments before you pay anything else).
Investing in the Stock Market
Building an investment portfolio is a process that depends on where a person is in their life as well as their financial goals. Every individual should consider long-term and short-term investments and the importance of portfolio diversification when building an investment portfolio and investing in the stock market.
These are big decisions to make. And sometimes you may need help. That’s where SoFi comes in. With a SoFi Invest® online brokerage account, you can trade stocks, ETFs, fractional shares, and more with no commissions for as little as $5. And you can get access to educational resources to help learn more about the investing process.
FAQ
How much money do you need to start building an investment portfolio?
The amount of money needed to start building an investment portfolio can vary depending on the type of investments chosen, but it is possible to start with a small amount, such as a few hundred or thousand dollars. Some online brokers and investment platforms have no minimum requirement, making it possible for investors to start with very little money.
Can beginners create their own stock portfolios?
Beginners can create their own stock portfolios. Access to online brokers and trading platforms makes it easier for beginners to buy and sell stocks and build their own portfolios.
What should be included in investment portfolios?
Experts recommended that investment portfolios should be diversified with a mix of different types of investments, such as stocks, bonds, mutual funds, ETFs, and cash, depending on the investor’s goals, risk tolerance, and time horizon. Regular monitoring and rebalancing are important to keep the portfolio aligned with the investor’s objectives.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
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Feb
17
2023
401(k) Taxes: Rules on Withdrawals and Contributions
Employer-sponsored retirement plans like a 401(k) are a common way for workers to save for retirement. According to the Bureau of Labor Statistics, a little more than half of private industry employees participate in a retirement plan at work. So participants need to understand how 401(k) taxes work to take advantage of this popular retirement savings tool.
With a traditional 401(k) plan, employees can contribute a portion of their salary to an account with various investment options, including stocks, bonds, mutual funds, exchange-traded funds (ETFs), and cash.
There are two main types of workplace 401(k) plans: a traditional 401(k) plan and a Roth 401(k). The 401(k) tax rules depend on which plan an employee participates in.
Traditional 401(k) Tax Rules
When it comes to this employer-sponsored retirement savings plan, here are key things to know about 401(k) taxes and 401(k) withdrawal tax.
Recommended: Understanding the Different Types of Retirement Plans
401(k) Contributions are Made With Pre-tax Income
One of the biggest advantages of a 401(k) is its tax break on contributions. When you contribute to a 401(k), the money is deducted from your paycheck before taxes are taken out, which reduces your taxable income for the year. This means that you’ll pay less in income tax, which can save you a significant amount of money over time.
If you’re contributing to your company’s 401(k), each time you receive a paycheck, a self-determined portion of it is deposited into your 401(k) account before taxes are taken out, and the rest is taxed and paid to you.
For 2023, participants can contribute up to $22,500 to a 401(k) plan, plus $7,500 in catch-up contributions if they’re 50 or older. These contribution limits are up from 2022, when the limit was $20,500, plus the additional $6,500 for those aged 50 and up.
401(k) Contributions Lower Your Taxable Income
The more you contribute to your 401(k) account, the lower your taxable income is in that year. If you contribute 15% of your income to your 401(k), for instance, you’ll only owe taxes on 85% of your income.
Withdrawals From a 401(k) Account Are Taxable
When you take withdrawals from your 401(k) account in retirement, you’ll be taxed on your contributions and any earnings accrued over time.
The withdrawals count as taxable income, so during the years you withdraw funds from your 401(k) account, you will owe taxes in your retirement income tax bracket.
Early 401(k) Withdrawals Come With Taxes and Penalties
If you withdraw money from your 401(k) before age 59 ½, you’ll owe both income taxes and a 10% tax penalty on the distribution.
Although individual retirement accounts (IRAs) allow penalty-free early withdrawals for qualified first-time homebuyers and qualified higher education expenses, that is not true for 401(k) plans.
That said, if an employee leaves a company during or after the year they turn 55, they can start taking distributions from their 401(k) account without paying taxes or early withdrawal penalties.
Can you take out a loan or hardship withdrawal from your plan assets? Many plans do allow that up to a certain amount, but withdrawing money from a retirement account means you lose out on the compound growth from funds withdrawn. You will also have to pay interest (yes, to yourself) on the loan.
Roth 401(k) Tax Rules
Here are some tax rules for the Roth 401(k).
Your Roth 401(k) Contributions Are Made With After-Tax Income
When it comes to taxes, a Roth 401(k) works the opposite way of a traditional 401(k). Your contributions are post-tax, meaning you pay taxes on the money in the year you contribute.
If you have a Roth 401(k) and your company offers a 401(k) match, that matching contribution will go into a pre-tax account, which would be a traditional 401(k) account. So you would essentially have a Roth 401(k) made up of your own contributions and a traditional 401(k) of your employer’s contributions.
Recommended: How an Employer 401(k) Match Works
Roth 401(k) Contributions Do Not Lower Your Taxable Income
When you have Roth 401(k) contributions automatically deducted from your paycheck, your full paycheck amount will be taxed, and then money will be transferred to your Roth 401(k).
For instance, if you’re making $50,000 and contributing 10% to a Roth 401(k), $5,000 will be deposited into your Roth 401(k) annually, but you’ll still be taxed on the full $50,000.
Roth 401(k) Withdrawals Are Tax-Free
When you take money from your Roth 401(k) in retirement, the distributions are tax-free, including your contributions and any earnings that have accrued (as long as you’ve had the account for at least five years).
No matter what your tax bracket is in retirement, qualified withdrawals from your Roth 401(k) are not counted as taxable income.
There Are Limits on Roth 401(k) Withdrawals
In order for a withdrawal from a Roth 401(k) to count as a qualified distribution — meaning, it won’t be taxed — an employee must be age 59 ½ or older and have held the account for at least five years.
If you make a withdrawal before this point — even if you’re age 61 but have only held the account since age 58 — the withdrawal would be considered an early, or unqualified, withdrawal. If this happens, you would owe taxes on any earnings you withdraw and could pay a 10% penalty.
Early withdrawals are prorated according to the ratio of contributions to earnings in the account. For instance, if your Roth 401(k) had $100,000 in it, made up of $70,000 in contributions and $30,000 in earnings, your early withdrawals would be made up of 70% contributions and 30% earnings. Hence, you would owe taxes and potentially penalties on 30% of your early withdrawal.
If the plan allows it, you can take a loan from your Roth 401(k), just like a traditional 401(k), and the same rules and limits apply to how much you can borrow. Any Roth 401(k) loan amount will be combined with outstanding loans from that plan or any other plan your employer maintains to determine your loan limits.
You Can Roll Roth 401(k) Money Into a Roth IRA
Money in a Roth 401(k) account can be rolled into a Roth IRA. Like an employer-sponsored Roth 401(k), a Roth IRA is funded with after-tax dollars.
One of the significant differences between a Roth 401(k) and a Roth IRA is that the 401(k) requires participants to start taking required minimum distributions at age 72, but there is no such requirement for a Roth IRA.
It’s important to note, however, that there’s also a five-year rule for Roth IRAs: Earnings cannot be withdrawn tax- and penalty-free from a Roth IRA until five years after the account’s first contribution. If you roll a Roth 401(k) into a new Roth IRA, the five-year clock starts over at that time.
Do You Have to Pay Taxes on a 401(k) Rollover?
If you do a direct rollover of your 401(k) into an IRA or another eligible retirement account, you generally won’t have to pay taxes on the rollover. However, if you receive the funds from your 401(k) and then roll them over yourself within 60 days, you may have to pay taxes on the amount rolled over, as the IRS will treat it as a distribution from the 401(k).
Recommended: How to Roll Over Your 401(k)
Do You Have to Pay 401(k) Taxes after 59 ½?
If you have a traditional 401(k), you will generally have to pay taxes on withdrawals after age 59 ½. This is because the money you contributed to the 401(k) was not taxed when you earned it, so it’s considered income when you withdraw it in retirement.
However, if you have a Roth 401(k), you can withdraw your contributions and earnings tax-free in retirement as long as you meet certain requirements, such as being at least 59 ½ and having had the account for at least five years.
Do You Pay 401(k) Taxes on Employer Contributions?
The taxation of employer contributions to a 401(k) depends on whether the account is a traditional or Roth 401(k).
In the case of traditional 401(k) contributions, the employer contributions are not included in your taxable income for the year they are made, but you will pay taxes on them when you withdraw the funds from the 401(k) in retirement.
In the case of Roth contributions, the employer contributions are not included in a post-tax Roth 401(k) but rather in a pre-tax traditional 401(k) account. So, you do not pay taxes on the employer contributions in a Roth 401(k), but you do pay taxes on withdrawals.
How Can I Avoid 401(k) Taxes on My Withdrawal?
The only way to avoid taxes on 401(k) withdrawals is to take advantage of a Roth 401(k), as noted above. With a Roth 401(k), your contributions are made post-tax, but withdrawals are tax-free if you meet certain criteria to avoid the penalties mentioned above.
However, even if you have to pay taxes on your 401(k) withdrawals, you can take the following steps to minimize your taxes.
Consider Your Tax Bracket
Contributing to a traditional 401(k) is essentially a bet that you’ll be in a lower tax bracket in retirement — you’re choosing to forgo taxes now and pay taxes later.
Contributing to a Roth 401(k) takes the opposite approach: Pay taxes now, so you don’t have to pay taxes later. The best approach for you will depend on your income, your tax situation, and your future tax treatment expectations.
Strategize Your Account Mix
Having savings in different accounts — both pre-tax and post-tax — may offer more flexibility in retirement.
For instance, if you need to make a large purchase, such as a vacation home or a car, it may be helpful to be able to pull the income from a source that doesn’t trigger a taxable event. This might mean a retirement strategy that includes a traditional 401(k), a Roth IRA, and a taxable brokerage account.
Decide Where To Live
Eight U.S. states don’t charge individual income tax at all: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. And New Hampshire only taxes interest and dividend income.
This can affect your tax planning if you live in a tax-free state now or intend to live in a tax-free state in retirement.
The Takeaway
Saving for retirement is one of the best ways to prepare for a secure future. And understanding the tax rules for 401(k) withdrawals and contributions is essential for effective retirement planning. By educating yourself on the rules and regulations surrounding 401(k) taxes, you can optimize your retirement savings and minimize your tax burden.
If you’re interested in saving and investing for retirement, SoFi can help. With SoFi Invest®, you can save for retirement by opening an online retirement account. SoFi offers Traditional, Roth, or SEP IRA, plus investors can access investment options, member services, and our robust suite of planning and investment tools.
FAQ
Do you get taxed on your 401(k)?
You either pay taxes on your 401(k) contributions — in the case of a Roth 401(k) — or on your traditional 401(k) withdrawals in retirement.
When can you withdraw from 401(k) tax free?
You can withdraw from a Roth 401(k) tax-free if you have had the account for at least five years and are over age 59 ½. With a traditional 401(k), withdrawals are generally subject to income tax.
How can I avoid paying taxes on my 401(k)?
You never truly avoid paying taxes on a 401(k), as you either have to pay taxes on contributions or withdrawals, depending on the type of 401(k) account. By contributing to a Roth 401(k) instead of a traditional 401(k), you can withdraw your contributions and earnings tax-free in retirement.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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