Suze Orman says keeping crypto in a retirement account is a big mistake. here’s why

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It could be a decision you will bitterly regret.

Key points Many people like to invest in cryptocurrency. Because it’s such a speculative investment, it may not be the most appropriate for your retirement savings.

Although it has been a tough year for cryptocurrency, many investors are still eager to invest in digital coins or hold on to the digital currency they purchased last year. If you are interested in buying cryptocurrency, you can do so as long as you understand the risks involved and exercise caution. This means not putting 80% of your money into crypto, but rather starting small and seeing how it goes.

But if you ask Suze Orman, she will tell you that investing in cryptocurrency for retirement is a very bad decision. And that is advice worth listening to.

An overly speculative asset

You’ll often hear that it’s a good idea to consistently fund an IRA for retirement so you have money to tap into later in life. And you don’t want to just leave your retirement savings in cash. On the contrary, you should invest this money so that it can grow into a larger sum over time.

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It’s also important to maintain a diversified mix of investments for retirement. This could help you take advantage of gains and minimize losses during periods of volatility.

But if there’s one thing Suze Orman would advise savers to steer clear of, it’s cryptocurrency. The reason? It is highly speculative.

Crypto has proven to be very volatile, but again, so have stocks. But while stocks have been around for a long time, cryptocurrency has only been around for a little over a decade. And it’s debatable whether it’ll still be a valuable asset a decade from now.

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Begin

It is easier to determine the value of a given stock based on information about the business behind it, i.e. by looking at assets, cash flow, revenue, etc. of this company. It is more difficult to determine what the cryptocurrency is worth and what it will be worth in the future.

One of the biggest question marks surrounding cryptocurrency is whether it will become a widely accepted form of payment. Some merchants already accept crypto payments today. But for the most part, you can’t just pay in crypto the way you can hand over a wad of cash or swipe a debit or credit card.

This makes cryptocurrency quite risky – riskier than stocks. If cryptocurrency does not become a mainstream payment option at some point in the future, its value could plummet.

We also don’t know how much cryptocurrency will be regulated over time. This too adds to the risk of owning it.

Think of cryptocurrency as a short-term asset

As a general rule, it’s a good idea to build your portfolio with quality investments that you’ve held for a long time. But crypto may be the exception to the rule. It may be best to think of cryptocurrency as a short-term asset and stick to more proven investments for your retirement nest egg.

You will need a considerable amount of savings to cover your living expenses once your career is over. And you don’t want to put your future financial security at risk by betting too much on crypto.

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