There have been numerous cryptocurrency offerings since 2009, when Bitcoin initially gained notoriety.
Given that Bitcoin’s value has grown by over 4000% since its launch, some retirees may be considering investing in cryptocurrencies for their later years.
Greg King, CEO of Osprey Funds, a division of REX Shares, a Connecticut-based producer of exchange-traded products, stated that basing retirement planning only on cryptocurrency investments would be a poor bet. “However, we think most long-term investors’ portfolios should unquestionably include an investment in bitcoin.”
Here are the top justifications and suggestions from financial professionals on how to approach cryptocurrency investing for retirement.
Investing. Close-up of a young trader with a beard using a computer to display a graph and financial reports while holding Bitcoin in one hand and working in his contemporary workplace. Crypto-currency. Virtual money. Concept for investment
Some retirement savers may ask if it makes sense to invest in cryptocurrencies for their golden years given that the value of Bitcoin has surged by over 4000% since its launch. (Image: Getty Images)
Decent results as far
Bitcoin is a potential addition to your investment portfolio due to its steady annual compound return.
King declared, “Bitcoin is here to stay. Over the past five years, it has generated a compound annual return of 121% on average. We anticipate that it will continue to grow at a faster rate than the total market because it is a new technology.
Buy now now
The greatest time to invest in cryptocurrencies is right now as opposed to later, particularly for people who are close to retiring.
Ethan Taub, CEO of Loanry, a California-based loan company, said: “Obviously there is the concept that it may go down also, but if you stay safe with a crypto that is simply gradually increasing, you are more than likely going to make a significant profit, if you keep it for a lot of years.” “Moving your income to cryptocurrencies will be a sensible decision for individuals who plan to retire in the next three to five years, since you may virtually quadruple it by doing so.”
Invest in 401(k) plans
Andres Garcia-Amaya, the CEO and founder of the financial company Zoe Financial, predicts that if you want to include cryptocurrency in your retirement plan, you’ll most likely do so through your employer’s 401k plan.
As with any other asset that can be kept in a 401(k), such as stocks, bonds, ETFs, etc., Garcia-Amaya predicted that cryptocurrencies would likely be treated similarly in a 401(k) plan.
For instance, Digital Asset Investment Management just introduced a 401k plan that is company-sponsored and will let you invest up to 10% of your account in Bitcoin.
Hire a specialist
While Garcia-Amaya does not discourage investors from including cryptocurrencies in their retirement plans, he advised them to be cautious to get expert advice from advisors who are familiar with the technology.
Choose an advisor who is thoroughly vetted, fee-only, and a real fiduciary, said Garcia-Amaya. You should work with a financial advisor who is knowledgeable with retirement planning, this technology, and the ramifications of selling because crypto retirement is a relatively new trend in the wealth management industry.
