Retirement saving is essential to ensure financial stability in the future. However, numerous individuals face difficulties in saving sufficiently. A FinanceBuzz study of 1,000 U.S. citizens sought to comprehend how Americans are handling this significant responsibility. Queries about cryptocurrency and COVID-19 unveiled novel tendencies in retirement investment strategies in the country.
Key findings
- Close to 44% of U.S. adults who’ve started saving for retirement say they have invested part of their retirement savings in cryptocurrency. Nearly half of these people indicated they have invested a “big” part of their retirement funds in crypto.
- More than three-fourths of people said that COVID-19 has NOT negatively impacted their retirement savings. In fact, 28% of those surveyed say they actually increased the amount they are contributing to retirement.
- The number of Americans who say they needed to withdraw retirement savings due to COVID-19 doubled between 2020 and 2021 (9% to 18%).
- One in five Americans (21%) have not started saving for retirement and more than one in three (35%) say they have “no idea” what they need to save to retire at their target age.
- When asked what roadblocks are hindering their ability to save for retirement, “not earning enough to save” and “health care expenses” were each cited by more than one-quarter of Americans.
- The number of Americans who say they’d give up their pets in exchange for being able to retire 10 years earlier nearly doubled between 2020 and 2021 (8% to 14%).
Crypto has gone mainstream for retirement savings
Despite initially being considered a marginal investment, cryptocurrency has made significant strides in becoming mainstream. A staggering 44% of American adults who have commenced retirement savings have introduced cryptocurrency into their investment portfolios. Among these crypto investors, half state that virtual coins constitute a significant portion of their retirement savings.
Although the cryptocurrency market is prone to volatility and some Americans struggle with purchasing cryptocurrency, the trend of investing retirement funds in crypto is expected to gain momentum. This sentiment is supported by the fact that approximately 14% of retirement savers expressed a desire to include cryptocurrency in their investment portfolios.
Even though cryptocurrencies are gaining popularity and obtaining wider acceptance, some individuals remain hesitant to invest in Bitcoin and other similar digital currencies.
Two main reasons were cited by individuals who were not interested in investing their retirement savings in cryptocurrency. The first was that cryptocurrency is seen as too high-risk by 35% of survey participants, while the same percentage believed that it is not a sound long-term investment.
However, a considerable number of Americans face an obstacle due to sheer lack of understanding. In actuality, 25% of the participants of the survey haven’t invested in cryptocurrency merely because they lack the knowledge. This section of people can benefit significantly from the increasing availability of retirement plans that allow crypto investments.
Take, for instance, …
- A growing number of the best investment apps now offer cryptocurrency, including Wealthfront , where investors can now add Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE) to their individual retirement account (IRA) portfolios.
- Bitcoin IRA now allows retirees to open a tax-advantaged investment account and use the money within it to purchase crypto or precious metals.
The trend of adding cryptocurrency to retirement portfolios will gain momentum with the streamlining of the purchase process by brokerage firms.
Americans are getting a late start on saving for retirement
Individuals in America have continuously postponed their retirement investment plans, as revealed by 21% of participants in the survey indicating a lack of savings. This percentage aligns with the statistics from 2020 where 19% of Americans confessed to having not started saving yet, and also with the data from 2019 where 20% had no retirement investment plans in place.
Postponing saving for retirement can result in difficulties in accumulating a sufficient amount of savings because of the missed opportunity for compound growth. Once money is invested, it has the potential to generate returns that could be reinvested. The longer individuals wait to start saving, the less they can take advantage of this opportunity to increase their wealth.
Fortunately, despite nearly 20% of Americans not having started saving, around 25% initiated retirement savings in their 20s, suggesting they may accumulate significantly larger retirement funds due to starting early with a longer period for investment.
Uncertainty about how much to save for retirement
Regrettably, a significant number of Americans lack a definite comprehension of the size of their required retirement savings. Merely 30% of surveyed participants possess a firm understanding of the sum needed to retire at their desired age. While 35% have a general idea of their required savings amount, an alarming 35% are clueless about the level of preparation necessary for securing their future.
Having no retirement savings target can prove challenging in terms of deciding the monthly amount to invest or evaluating one’s preparedness for retirement.
Fortunately, the majority of individuals who initiate savings have a reliable tendency to continue doing so, with only 7% of those who started saving for retirement reporting that they are not presently adding to their funds. Additionally, nearly half of savers are dedicating over 10% of their earnings to their retirement accounts. This displays potential for a significant portion of the American population to accumulate a substantial nest egg that can afford them future financial stability.
Best Crypto IRAs
A crypto IRA could be a beneficial option for those seeking to increase their cryptocurrency wealth. By utilizing a cryptocurrency IRA, you can steer clear of capital gains taxes, as long as your investments remain in your IRA account. While cryptocurrencies are known for their volatility, they have consistently outperformed most other investment options over the past decade. They have displayed predictable patterns of bull and bear markets, typically resulting in painful declines following impressive surges. Despite this, the cryptocurrency market has rebounded every time it’s crashed (excluding the recent one) and achieved new heights. If you have confidence in a future driven by decentralization, it’s worth considering establishing an investment retirement account with a platform offering cryptocurrency access while avoiding capital gains taxes.
Best Crypto IRAs
After becoming familiar with the cryptocurrency IRA’s overall guidelines and restrictions, it’s time to examine the top contenders. Multiple choices are available for evaluation, although these platforms usually come with steeper charges than standard crypto exchanges; nonetheless, the tax advantages more than compensate for this tradeoff.
1. iTrustCapital: The Best Crypto IRA for Beginner Cryptocurrency Investors
iTrustCapital is a top-rated trading platform for digital asset IRAs where users can purchase and trade cryptocurrencies and physical gold in real-time, all within their retirement accounts.
Their pricing is completely transparent and includes a trade fee of 1% for crypto and an additional charge of $50 above spot for gold. Moreover, they offer the following services:
- IRA setup at iTrust Custodial Services
- Facilitation of any transfers to your IRA
- IRS and tax reports by iTrust Custodial Services
- Unlimited storage with institutional custody partners
- Platform support and maintenance
2. Bitcoin IRA
With Bitcoin IRA, you get a comprehensive package that enables you to invest in a range of cryptocurrencies, such as Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, and Ethereum Classic using your IRA. This vast selection significantly surpasses what other Bitcoin IRA firms offer. The company strives to streamline and secure the intricate venture of crypto investing.
BitGo Trust, powered by BitGo Inc.’s technology, insures and stores your digital assets for a maximum of $100 million. BitGo Inc., the world’s largest processor of on-chain bitcoin transactions, processes 20% of all global Bitcoin transactions and retains more than $2 billion in assets in its wallet.
It only takes a few minutes to open a Bitcoin IRA account, whether you require assistance with a rollover, traditional IRA, or Roth IRA.
3. Broad Financial: The Best Crypto IRA for a Variety of Alternate Assets
With Broad Financial, you have the flexibility to direct your IRA as you see fit. It is a crypto IRA trust that has fixed fees, eliminating the need for asset-based or transaction fees. The platform offers a vast variety of tokens to choose from, and you are free to select any exchange to carry out your trades.
The structure of fees includes:
- $1195 one-time setup fee
- $100 one-time custodian setup fee
- $380 annual maintenance fee (payable in $95 quarterly installments)
- Free lifetime customer support
- Tax-advantaged accounts
One of the major benefits that sets Broad Financial apart is the capability to retain ownership of your private keys. This gives you distinct advantages that are not available with other companies, such as:
- Choosing the storage format you prefer
- Using an existing wallet
- Customizing your security for your own peace of mind
It is also possible to make investments in:
- Real estate
- Private loans
- Precious metals
- Small businesses, etc.
By being this flexible, it becomes possible for you to transfer your retirement funds to your preferred destinations, resulting in time and energy conservation, as well as a boost in your overall assets.
4. My Digital Money
My Equity Trust collaborates with a U.S.-based cryptocurrency trading platform called My Digital Money to offer self-directed cryptocurrency IRA products. By paying a setup fee of $50, you can invest using your IRA funds and receive tax-advantaged or tax-free returns that boost your retirement investments.
A variety of IRA accounts are available for you to open, such as:
- Simple IRA
- Traditional IRA
- Roth IRA
- Simplified Employee Pension Plan (SEP) IRA
Begin trading by creating a cash account and take advantage of the MDM platform’s ability to trade independently from current markets, leading to decreased risk and optimal pricing. Employ limit orders that execute transactions at designated prices or following certain price adjustments.
You have the absolute authority over your IRA finances, and you may opt to conduct crypto transactions separately from your IRA using the same platform.
5. BitIRA
Many crypto IRA providers do not provide assurances for the safety of your cryptocurrency. BitIRA, however, takes a different approach by providing comprehensive insurance for your account.
Not only do you receive authentic cold storage for your cryptocurrency, but it is also secured in a safe within a facility staffed with constant physical security. Furthermore, you will be provided exceptional customer service that will enable you to feel at ease even if you are unfamiliar with crypto investments.
BitIRA offers a range of cryptocurrencies that consist of Bitcoin, Bitcoin Cash, Litecoin, Ethereum Classic, Ethereum, and Ripple.
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