For years, pension plans gave the right returns for retirement. People used to invest in assets like bonds, stocks, government securities, and others. The aim was to get long-term security as a retiree.
However, times are changing in the financial world. Simultaneously, the expectations of the modern generations are also changing. You will barely find someone who doesn’t prefer digital assets now. Hence, the question- is it time to include crypto in retirement plans as well?
The Divide
A group of people feels it is the right way. Others feel that it is not the right move in terms of financial innovation or economic transformation.
As we explore the cross-dependency between crypto and pension funds, there might be a million possibilities we are looking at. But it is more important that we appreciate the risks, benefits, and possibilities going forward.
How Is Retirement Planning Changing?
Today’s workforce is highly tech-literate. So they are quite receptive to innovation. Conversely, they are cynical about the nitty gritty of the traditional financial verticals. But why does this generation favor cryptocurrency as a component of a retirement fund?
Firstly, crypto comes with high decentralization. Hence, the risk of investing in crypto is lower. At the same time, crypto offers high return possibilities as well. However, most of the other assets can have performance downtimes that will affect retirement profiles badly.
That’s where crypto is different. Even when the economy is astray, there will be one or the other coin that is performing well.
The Global Trends
Some countries have introduced crypto in their pension schemes already. For example, the US has already introduced multiple pension schemes with slight exposure to cryptocurrency. In this case, the crypto ETFs are given preference.
Similarly, parts of Europe and Latin American pension regulators are testing blockchain-based financial tools for the transparency element and their efficiency factor.
Are you ready to build a crypto-based pension fund yet?
