Rumors Dismissed by Central Bank of Nigeria (CBN)
The Central Bank of Nigeria (CBN) has recently addressed and dismissed rumors circulating about the demonetized naira banknotes. According to the CBN, all banknotes issued by the central bank remain legal tender and should not be rejected by anyone. The CBN clarified its position in a statement released via X (formerly Twitter) on November 8.
Continuation of Legal Tender
The CBN emphasized that the laws governing its operations clearly state that all banknotes issued by the central bank should not be rejected. In order to enforce this, CBN branches across the country have been instructed to continue issuing both the old and redesigned naira banknotes in different denominations. This ensures that the demonetized banknotes still hold value and can be used for transactions.
Background on Demonetization
The demonetization process of the naira banknotes was initiated by the then-governor Godwin Emefiele. The objective was to combat the activities of parallel market foreign exchange dealers and currency hoarders. However, some local media reports claimed that the exercise was politically motivated to hinder the campaign of Bola Tinubu, a presidential aspirant at the time.
CBN Warns Against Panic Withdrawals
It has been suggested that the CBN's attempt to demonetize the old naira banknotes without providing an adequate supply of the redesigned banknotes led to cash shortages. Initially, the CBN resisted extending the deadline, but eventually, it relented, and the demonetized banknotes were once again accepted as legal tender. In light of the ongoing situation, the CBN has issued a warning to individuals and entities who are rejecting the old banknotes. It reiterated that all denominations of banknotes issued by the CBN remain legal tender, and it is unlawful to refuse the naira as a means of payment. Additionally, the CBN encouraged the public to avoid panic withdrawals and consider alternative modes of payment.
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Frequently Asked Questions
How much money should I put into my Roth IRA?
Roth IRAs can be used to save taxes on your retirement funds. These accounts are not allowed to be withdrawn before the age of 59 1/2. There are some rules that you need to keep in mind if you want to withdraw funds from these accounts before you reach 59 1/2. First, you can't touch your principal (the initial amount that was deposited). This means that you can't take out more money than you originally contributed. If you take out more than the initial contribution, you must pay tax.
The second rule is that your earnings cannot be withheld without income tax. So, when you withdraw, you'll pay taxes on those earnings. Consider, for instance, that you contribute $5,000 per year to your Roth IRA. In addition, let's assume you earn $10,000 per year after contributing. You would owe $3,500 in federal income taxes on the earnings. So you would only have $6,500 left. The amount you can withdraw is limited to the original contribution.
So, if you were to take out $4,000 of your earnings, you'd still owe taxes on the remaining $1,500. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). You only got back $4,000. Even though you were able to withdraw $7,000 from your Roth IRA,
There are two types if Roth IRAs, Roth and Traditional. A traditional IRA allows you to deduct pre-tax contributions from your taxable income. You can withdraw your contributions plus interest from your traditional IRA when you retire. A traditional IRA can be withdrawn up to the maximum amount allowed.
Roth IRAs are not allowed to allow you deductions for contributions. You can withdraw your entire contribution, plus accrued interests, after you retire. There is no minimum withdrawal required, unlike a traditional IRA. Your contribution can be withdrawn at any age, not just when you reach 70 1/2.
What are some of the advantages and disadvantages to a gold IRA
An Individual Retirement account (IRA) is a better option than regular savings accounts in that interest earned is exempted from tax. This makes an IRA a great choice for people who are looking to save money but don’t want to pay any tax on the interest earned. But, this type of investment comes with its own set of disadvantages.
You may lose all your accumulated savings if you take too much out of your IRA. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. If you do decide to withdraw funds from your IRA, you'll likely need to pay a penalty fee.
Another problem is the cost of managing your IRA. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management fees ranging from $10 to $50.
You can purchase insurance if you want to keep your money out of a bank. Many insurers require that you own at least one ounce of gold before you can make a claim. You may be required by some insurers to purchase insurance that covers losses as high as $500,000.
You will need to decide how much gold you wish to use if you opt for a gold IRA. Some providers limit the number of ounces of gold that you can own. Others let you pick your weight.
It's also important to decide whether or not to buy gold futures contracts. Gold futures contracts are more expensive than physical gold. Futures contracts provide flexibility for purchasing gold. You can set up futures contracts with a fixed expiration date.
It is also important to choose the type of insurance coverage that you need. The standard policy does not include theft protection or loss caused by fire, flood, earthquake. It does include coverage for damage due to natural disasters. If you live in a high-risk area, you may want to add additional coverage.
Additional to your insurance, you will need to consider how much it costs to store your gold. Storage costs will not be covered by insurance. For safekeeping, banks typically charge $25-40 per month.
Before you can open a gold IRA you need to contact a qualified Custodian. Custodians keep track of your investments and ensure compliance with federal regulations. Custodians cannot sell your assets. Instead, they must hold them as long as you request.
Once you've chosen the best type of IRA for you, you need to fill in paperwork describing your goals. You must include information about what investments you would like to make (e.g. stocks, bonds and mutual funds). You should also specify how much you want to invest each month.
After filling in the forms, please send them to the provider. The company will review your application and send you a confirmation letter.
If you are thinking of opening a gold IRA for retirement, a financial professional is a great idea. A financial planner can help you decide the type of IRA that is right for your needs. They can also help you lower your expenses by finding cheaper alternatives to purchasing insurance.
Should You Get Gold?
Gold was considered a safety net for investors during times of economic turmoil in the past. However, today many people are turning away from traditional investments such as stocks and bonds and instead looking toward precious metals such as gold.
While gold prices have been rising in recent years they are still low relative to other commodities, such as silver and oil.
Some experts think that this could change in the near future. They believe gold prices could increase dramatically if there is another global financial crises.
They also pointed out that gold is gaining popularity due to its perceived value, and potential return.
Consider these things if you are thinking of investing in gold.
- Before you start saving money for retirement, think about whether you really need it. It's possible to save for retirement without putting your savings into gold. That said, gold does provide an additional layer of protection when you reach retirement age.
- Second, ensure you fully understand the risks involved in buying gold. Each one offers different levels security and flexibility.
- Last but not least, gold doesn't provide the same level security as a savings account. It is possible to lose your gold coins.
So, if you're thinking about buying gold, make sure you do your research first. You should also ensure that you do everything you can to protect your gold.
How to open a Precious Metal IRA
It is important to decide if you would like an Individual Retirement Account (IRA). Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. To determine which type of IRA you qualify for, you will need to fill out Form 5204. This form should be completed within 60 days after opening the account. Once you have completed this form, it is possible to begin investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
Complete Form 8903 if your Roth IRA option is chosen. Otherwise, the process will be identical to an ordinary IRA.
To be eligible to have a precious metals IRA you must meet certain criteria. The IRS stipulates that you must have earned income and be at least 18-years old. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. Contributions must be made regularly. These rules will apply regardless of whether your contributions are made through an employer or directly out of your paychecks.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. However, you won't be able purchase physical bullion. This means you won't be allowed to trade shares of stock or bonds.
However, there are two significant drawbacks to investing in precious metals via an IRA. First, they don't have the same liquidity as stocks or bonds. It is therefore harder to sell them when required. They don't yield dividends like bonds and stocks. Also, they don't generate dividends like stocks and bonds. You will eventually lose money rather than make it.
Can I buy or sell gold from my self-directed IRA
Your self-directed IRA can be used to purchase gold, but first you need to open an account with a brokerage firm such as TD Ameritrade. You can also transfer funds from an existing retirement fund.
The IRS allows individuals to contribute up to $5,500 annually ($6,500 if married and filing jointly) to a traditional IRA. Individuals can contribute up $1,000 per annum ($2,000 if they are married and jointly) directly to a Roth IRA.
You should consider buying physical gold bullion if you decide to invest in it. Futures contracts, which are financial instruments based upon the price of gold, are financial instruments. You can speculate on future prices, but not own the metal. But, physical bullion is real bars of gold or silver that you can hold in one's hand.
What precious metals can you invest in for retirement?
It is gold and silver that are the best precious metal investment. Both are easy to sell and can be bought easily. You should add them to your portfolio if you are looking to diversify.
Gold: This is the oldest form of currency that man has ever known. It is very stable and secure. This makes it a good option to preserve wealth in uncertain times.
Silver: Silver has been a favorite among investors for years. It is an excellent choice for investors who wish to avoid volatility. Silver tends instead to go up than down, which is unlike gold.
Platinum: A new form of precious metal, platinum is growing in popularity. It is very durable and resistant against corrosion, much like silver and gold. It is, however, more expensive than its competitors.
Rhodium: Rhodium can be used in catalytic convertors. It is also used in jewelry-making. It is also very affordable in comparison to other types.
Palladium – Palladium is an alternative to platinum that's more common but less scarce. It's also much more affordable. For these reasons, it's become a favorite among investors looking to add precious metals to their portfolios.
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement account
- Are You a Good Candidate for a Gold IRA
- What are the Options? Types, Spreads, Example, and Risk Metrics
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- How do you keep your IRA Gold at Home? It's Not Exactly Legal – WSJ
Guidelines for Gold Roth IRA
It is best to start saving early for retirement. As soon as you become eligible, which is usually around age 50, start saving and keep it up throughout your career. It's vital to contribute enough money each year to ensure adequate growth on an ongoing basis.
Additionally, tax-free opportunities like a traditional 401k or SEP IRA are available. These savings vehicles permit you to make contributions, but not pay any tax until your earnings are withdrawn. This makes them great options for people who don't have access to employer matching funds.
The key is to save regularly and consistently over time. If you aren't contributing the maximum amount permitted, you could miss out on tax benefits.
By: Terence Zimwara
Title: Nigerian Central Bank Confirms Demonetized Naira Banknotes Still Legal Tender
Sourced From: news.bitcoin.com/nigerian-central-bank-dismisses-old-naira-banknote-and-cash-shortage-rumors/
Published Date: Fri, 10 Nov 2023 23:30:51 +0000
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