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Better late than never, right?
Data from the Transamerica Institute shows eight in 10 not-yet-retired middle-class Americans agree that today’s high cost of living is making it harder for them to save for retirement, while more than half of current retirees regret not saving sooner or enough. It’s no wonder, then, that many are seeking new potential sources of wealth creation ahead of retirement. For an increasing number of people, cryptocurrencies fit the bill.
“We’re seeing significant interest among people aged 45+ looking into crypto investments,” said Ryan Horst, CEO and co-founder of the cryptocurrency investor education service Altcoin Pro. “Many of them have significant wealth and a lot to lose, so it’s really important that they know what they’re doing.”
Financial advisors told Retirement Upside that trying to “catch up” with crypto has some merit, but most voiced significant caution about the risks involved. When evaluating the inclusion of digital assets like bitcoin in a client’s portfolio, the decision depends on the specific client, their goals and their risk tolerance. There is no perfect asset or allocation, advisors agreed, and not everyone is suited to be a crypto investor.
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Crypto Cautious
“I’ve seen more clients over 45 interested in crypto, especially those who feel behind on retirement,” said Joon Um, tax advisor at Secure Tax & Accounting. “The danger is treating it as a shortcut to catch up. Crypto can offer growth, but it is highly volatile. I would keep it as a small, speculative part of a diversified retirement plan.”
Kevin Feig, founder of Walk You To Wealth and former head of risk at the crypto exchanges Coinbase and Kraken, agreed. “While there are a lot of digital assets available, most are simply noise,” he warned. “They aren’t one-size-fits-all, and most have drastically different use cases and profiles.”
Bitcoin and ether, for example, are often linked in news articles because they are the largest by market cap, but they have very different characteristics:
Bitcoin, for example, is best explained to clients as a collectible: If there’s no demand, there’s no value.
Ethereum, on the other hand, is essentially a tech platform that enables fast, low-cost transactions via decentralized financial systems.
