Saving up money for harsher times has been a go-to solution for many generations now. Especially in this day and age with low to negative interest rates and very volatile stock markets. But as it turns out, saving too much money is not always the best course of action. Since there are very few viable investment opportunities left, looking closer at Bitcoin for a retirement fund may not be such a bad idea.
Building A Retirement Fund Is Not Easy
Most people assume that slowly building up a retirement fund will be enough to cover all costs and allows for living a comfortable life. But in most cases, that is not entirely accurate, as elder people often complain they can barely make ends meet. Saving up money for a rainy day is a traditional strategy to have some financial breathing room, and for most, it works just fine. That being said, the situation may come to change very soon.
This situation is only made more difficult since no one knows how much they “need” to retire comfortably. The more, the better is always the case, but there has to be a “perfect spot” for people on the brink of retiring. Putting together a retirement savings portfolio needs to support a 4% annual withdrawal, according to some financial experts.
Truth be told, the rate of 4% may not be sufficient for most people, and a 6% threshold is more realistic. To put this in perspective, that would require a lot of money to be saved up throughout one’s life. Market volatility presents very few viable investment options these days. Stocks are no longer a haven, and gold will not appreciate much over time to make sure enough money can be saved.
Moreover, there is a problem with the “saving up money” approach. As people stash away a portion of their income throughout their career, they will continue to save money even when they enter retirement. All of that money saved will not be used correctly, creating an underspending situation. On the other side of the medallion, there are those who overspend before coming into the retirement stage, which is not an ideal situation either.
Bitcoin Is A Long-Term Solution
A solution has to be found, albeit it is doubtful traditional solutions will offer any improvement. Better formulas about retirement spending and saving based on the economic outlook is an option worth exploring. For those who are thinking long-term saving and spending, Bitcoin may represent the best retirement fund option.
Even when someone has little to no experience with Bitcoin, it shouldn’t be hard to explain to them what the benefits are from a retirement fund perspective. Bitcoin is scarce and globally accepted. People can buy it from ATMs and exchanges around the world. Plus, Bitcoin can appreciate in value, and see spectacular gains over time. No one is saying people should put all of their savings in Bitcoin either. But a little bit of diversification can go a very long way.
Source: MarketWatch
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