If you’re nearing your 62nd birthday, you probably don’t think a whole lot about the retirement portfolio you’ve been contributing to for years now. In fact, you might not even know precisely what’s in it since you’ve hired a professional financial advisor to manage it. Or maybe the company you’ve been working at for decades has been managing it.
But what happens when that all-important 62 arrives, and it turns out your portfolio isn’t enough to get you through what could arguably be another 20 to 30 years of life? You’re in luck if you’ve owned your own home for so long you’ve been able to build up a heck a lot of equity. It means if your retirement portfolio is showing a shortfall, you just might be able to make up for it by applying for a reverse mortgage.
A reverse mortgage loan allows you to tap into your home’s equity without having to pay a monthly fee like you would for a traditional home loan. You can take the proceeds from the loan in a one lump sum payment, or in the case of someone who isn’t making enough from their retirement portfolio, you can make a monthly payment to supplement your retirement income. In either case, you don’t need to pay the loan back until you leave the house or you die. Simple as that. You can figure how much of a reverse mortgage you qualify for based on this calculator: https://reverse.mortgage/calculator.
But what if you don’t own your home, or what if you’ve rented all your life. Certainly, a reverse mortgage is out of the question. But there is another option that could grow your retirement portfolio by leaps and bounds. Cryptocurrency. In particular Bitcoin (BTC).
Say a recent report by MSNBC, a recent Bitcoin conference held in Miami not only drew a fascinating mix of financial professionals including BTC billionaires like Michael Saylor and Max Keiser, it caught the attention of the entire world. It also caught the attention of the Chief Financial Officer for ForUsAll, David Ramirez, who was quoted as saying he was surprised to see attendees embracing what amounts to a radically new way of thinking about the investment holdings.
Ramirez said, “I met with a lot of people who had been investing in this space for quite a while, who were staring down massive capital gains exposure. In the 401(k), that can largely be eliminated.”
ForUsAll made a stunning announcement recently that it will be teaming up with the cryptocurrency exchange platform, Coinbase, to allow employees to place up to 5 percent of their 401(k) in Bitcoin and other cryptos. ForUsAll is said to not be the only company to offer Bitcoin to bolster employee 401(k) plans. Digital Asset Investment Management, Bitwage, Microstrategy and more are also bringing nontraditional cryptocurrencies to traditional retirement accounts.
It’s said that individual investors can already tap into Bitcoin and other cryptos of their choosing via their individual retirement accounts. There’s a growing appetite to do this since many feel as though their individual accounts will not sustain their lifestyle in their retirement years. With BTC boasting an annual 200 percent return and the dollar losing its value, it is quickly being adopted by both individual retailers and institutional players. Now entire countries like El Salvador and soon Paraguay are entering the BTC fold.
All this said, however, some plan sponsors are skeptical of BTC and crypto in general. Senior Vice President for Alliant Retirement Consulting, Aaron Pottichen, said, “Plan sponsors, in general, are still very unlikely to want to adopt any type of cryptocurrency into their investment line-up.” In other words, will investment in BTC/crypto end up helping or hurting investors down the road? That’s the trillion-dollar question.
Ramirez went on to say that because 401(k) plans remain the primary savings choice for most Americans, not being able to add crypto to their plans puts them at a “structural disadvantage.” The reason? Taxes. But Roth 401(k) accounts in which post-tax dollars are placed, can offer a significant advantage to BTC investors.
“If you invest in cryptocurrency in your 401(k) with Roth dollars, you get to keep 100% of the gains, essentially making it tax-free for you forever,” said Ramirez. Also, by investing in BTC via a Roth 401(k), people can altogether avoid the tax trading risk that all crypto holders face when they take profits.
Although some financial planners might not be on board with BTC yet, most agree, by unchaining the traditional 401(k) to accept nontraditional digital assets, sooner or later, the crypto market will have no choice but to explode in value.