Wednesday, February 28, 2024

Should I Include Cryptocurrency When Investing for Retirement?

There’s been a lot of talks lately about cryptocurrency and the effect it could have on our economy in the future. One question we hear from those who come to us for retirement planning advice is whether to include crypto as part of an overall portfolio strategy.

The truth? There are pros and cons to doing this. While there are some advantages, the risks might be enough to discourage even some of the savviest investors. Here’s what you should know before you take the leap and invest heavily in cryptocurrency.

The Pros of Cryptocurrency Investment

Before we head into the risks associated with investing for retirement using cryptocurrency, let’s look at a few of the pros.

  • Easy to Obtain: The barrier to entry with cryptocurrency is incredibly easy. Just about anyone can add it to their portfolio with very little effort.
  • Lower Fees: Fees to buy cryptocurrency are often super low, which is different from many other investment options out there.
  • Large Gains in Short Term: While it might not be a good idea to bank your entire portfolio on cryptocurrency, there is money to be made via large gains in the short term.

The Cons of Investing in Cryptocurrency

Of course, since this part of the financial services niche is fairly new, there are some big risks of investing in cryptocurrency. Here is what you want to watch out for or keep in mind before purchasing.

  • Volatility of Growth: It’s hard to say what cryptocurrency will be valued at a year from now, let alone when you plan on retiring.
  • Not Universally Accepted: Essentially, cryptocurrency isn’t a real currency in terms of wide availability for use. If your entire retirement portfolio is based around it, there’s a chance you might not be able to use it later when you need it most.
  • Very Little Government Oversight: Many of the banking regulations we have in place aren’t yet equipped to deal with the many different cryptocurrencies available.

How to Include Cryptocurrency in Your Investment Portfolio

Instead of banking your entire retirement on the rise and fall of crypto, we suggest this. Make a small investment that wouldn’t sink your portfolio if it tanked in the future.

Best case scenario? You end up with again in a few weeks, months, or years that can be used for other investments or a bigger chunk of cryptocurrency. Worst case, you tried it out. But you were never so committed that you lost everything, jeopardizing your financial future.

By thinking of cryptocurrency as a fun and entertaining investment to follow, you can help protect yourself from the risks associated with an untested currency.

Voyager Advisory Group Can Help with Retirement Planning

Before you go off purchasing a large amount of Bitcoin with hopes of striking it rich, it is a good idea to talk to a retirement planning expert. Finding an advisor in Toledo for investing in retirement is easy when you work with Voyager Advisory Group. Our team of experts can help you make smart decisions and invest in your future wisely. Please contact us today to schedule an appointment.

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