Cryptos as Retirement Catch-Up: Advisors Warn of High-Risk Strategy
As people approach retirement age, they're often struck by regret over not saving enough earlier in their lives. Three-quarters of retirees surveyed by the Transamerica Institute wish they had saved more after getting started.
In response to this feeling of being behind, some are turning to cryptocurrencies as a way to catch up on their retirement savings. According to Ryan Horst, CEO and co-founder of Altcoin Pro, there's significant interest in crypto investments among people aged 45+, many of whom have substantial wealth.
However, financial advisors express caution about the risks involved with investing in crypto for retirement. Joon Um, a tax advisor at Secure Tax & Accounting, warns that treating crypto as a shortcut to catch up on savings can be dangerous. 'Crypto can offer growth,' he says, 'but it is highly volatile.' Advisors agree that clients should approach crypto investments with a clear understanding of their goals and risk tolerance.
Some advisors, like Kevin Feig, founder of Walk You To Wealth and former head of risk at Coinbase and Kraken, emphasize the importance of understanding why one holds specific digital assets. 'You want to understand why you are holding any digital asset and how it fits into your overall portfolio,' he advises.
Not everyone is convinced that crypto has a place in retirement portfolios, though. Monica Dwyer at Harvest Financial Advisors thinks using risky assets like cryptocurrency is a 'very bad idea.' She recommends instead reassessing one's spending habits and saving more.