CRYPTOCURRENCY AS A VIABLE OPTION FOR RETIREMENT INVESTMENT

In Post Covid phase, the financial crisis has become a major concern for investors all across the globe. There has been a steady rise in anti-risk perspective and inclination to invest in safer modes like banks and reliable financial institutions. According to a recent study, three out of four Americans are worried about financial stability and are no longer keen about investing even in stock markets. Against the backdrop of economic gloom, retaining trust has become very crucial. Hence, one can think of investing in cryptocurrency for better returns in retirement phase.

Before one decides to invest in the crypto market to diversify a retirement portfolio, it is very important to consider some integral factors. Most senior citizens want to have a safe retirement policy that guarantees security and secure return. However, when we see stalwarts like Elon Musk endorsing cryptocurrency, we cannot help but show enthusiasm for its prospects. As Musk rightly said, “I could either watch it happen or be a part of it.”

As prudent investors, we need to decide how viable cryptocurrency is in terms of investment.

Factors

What are the vital factors that one must consider before adding cryptocurrency to your retirement portfolio?

First and foremost, age. Sometimes, seniority becomes a crucial factor and senior people opt for a more secure safety net.

The amount of money that a person has at his or her disposal is also important. In case of limited resources, it is not always possible to invest in cryptocurrency taking into consideration the risk factors.

The third important factor is the willingness to take risks. Many senior individuals want to add cryptocurrency to their investment portfolio but not all are willing to take risks. It is important to understand the nature of investment and whether the particular cryptocurrency has long-term potential or not.

Security issues often trouble investors- the volatility of the market, the threat of malware or spyware attacks, and so on.

Depending on the context and certain specific factors, one can consider the prospects of investing in cryptocurrency for reaping retirement benefits.

A Landmark Decision

Many investors have shown keenness in adding cryptocurrency to their retirement portfolio after the landmark decision by Fidelity Investment.

Fidelity, the largest retirement provider in the US, declared that individuals will have the option of investing in cryptocurrency as part of a 401(k) account. According to a digital asset study conducted by Fidelity in 2021, around 30% of investors wanted to invest in digital assets.

However, the Labor Department of the US has advised investors to take caution while adding crypto to their 401(k) portfolios. Cryptocurrency indeed has scope for potential growth but it is apt to be prudent in case of such investments.

In the words of Charles Field of Sanford Heisler Sharp,” Employers who offer Bitcoin in their 401(k) plans do so at their peril.” Any investor must keep in mind the fact that Bitcoin neither pays any rate of interest nor does it generate any cash flow.

The Safety Net

The easiest way is to plan a systematic retirement investment plan. One can go for a Systematic Investment Plan (SIP) for crypto investment. A weekly or monthly plan is preferable as per the prudent advice of crypto experts.

Decolonizing the mind

We generally rely on our age-old traditional mindset and perspectives. People who are keen on retirement portfolios still rely on banks and financial institutions for security. In today’s world, even investing in real estate and property can be counterproductive.

Clinging to an orthodox mindset and outdated banking infrastructure may not always help investors. Let us remember that something static can never be synonymous with growth.

Keeping at par with market dynamics, we can diversify our retirement portfolio through well-informed choices.

Influencers have a vital role to play in creating greater awareness about the crypto market. At the same time, the government can also venture to create an appropriate environment to boost investment. They can come up with flexible regulations which can eliminate fears from the minds of investors.

The government can take measures to increase transparency, and provide greater scope and financial liberty to investors. This will foster greater trust and pave the ground for better investment.

The Clarion call

There is no doubt in the fact that the exponential wave of technological change necessitates the adoption of alternative assets. Our age-old reliance on the banking system will no longer serve the purpose.

We cannot simply ignore the prospects offered by cryptocurrency based on our prejudices. However, the time has come when each individual must be well-informed about the market dynamics, and latest trends in cryptocurrency and invest wisely.

Our prudent choices and appropriate decisions can indeed open a world of limitless avenues in front of us. We simply need to debunk the orthodox myths and diversify our retirement portfolio through apt decisions based on the right context.

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