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Should you invest in cryptocurrencies as a retirement strategy?

On Behalf of | Mar 18, 2021 | Estate Planning |

When you ponder your estate planning options, there are myriad investment strategies to consider. Some are more lucrative and volatile than others, which can add to your confusion.

Unless you have spent the past few years living under a rock, you have certainly heard about cryptocurrencies like Bitcoin. Should you drop some funds earmarked for retirement into the cryptocurrency pools?

Be wary of cryptocurrency’s volatility

While there is nothing wrong with dipping a toe into the cryptocurrency pool, one investment professional who is the co-founder and president of an Alexandria, Virginia, wealth management group urges great caution.

He said, “[Cryptocurrencies] concern me. You could wake up one morning and all of your money is gone . . . I don’t think that’s a prudent strategy for anyone saving for retirement.”

The problem lies with the speculative value of cryptocurrencies. What appears red-hot today might have fallen off the charts when it is time to reap in your retirement dollars. As stated by the University of Missouri’s personal financial planning department’s chair emeritus, “I have confidence in the U.S. market in the long term. I don’t know if there’s going to be a market for Bitcoin six months from now, let alone 60 years from now.”

Cryptocurrency as a diversification strategy

There is good reason to not put all of your financial eggs in a single basket, and most financial planners encourage their clients to diversify their portfolios. If you have some extra money to play with that will not be devasting to lose, you could make a small investment in cryptocurrencies like Ethereum or Bitcoin.

Make sure your estate plan is well-advised

The best way to protect you and your spouse financially in your golden years to consult with an estate planning professional now while you have years of earning ahead of you. That way you can learn how to make your money work most effectively for you when your need for it is greatest.