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Worried about inflation’s impact on your retirement savings? Invest in cryptocurrency

Around the world, personal financial stress is at its peak.Recent research in America found More than 3 in 4 feel insecure about their financial situation. This has fueled a risk-averse mindset and raised concerns about the safety of long-term savings, including retirement.

However, that shouldn’t mean hiding money under floorboards. Nor does it necessarily mean handing over the reins to low-growth pension funds that are losing value at current inflation rates. It means being smarter about evaluating and diversifying all your options. And that requires freedom.

That’s what Alabama Senator Tommy Tuberville (Republican) was advocating. proposed the Financial Freedom Act In May, all Americans with voluntary retirement plans will be able to add cryptocurrency to their 401(k) defined contribution personal pension account. This was prompted by regulatory guidance from the U.S. Department of Labor in March seeking to ban 401(k) accounts from investing in cryptocurrencies.

Freedom is often seen as the enemy of stability, but fear is actually the enemy of stability. And that’s what the U.S. government’s stupidity about alternative assets is fueling. Much of the media was quick to jump on the anti-crypto bandwagon as well.A quick Google search for coverage of Fidelity announcement Allowing participants to invest 20% of their employer-sponsored 401(k) retirement plans in Bitcoin reveals overwhelming negativity, or at least skepticism.

To exacerbate perceptions, many are further delaying incorporating rockstar assets like cryptocurrencies into pension portfolios following May’s executive order. Collapse of the Terra ecosystem. Most people just want the option to retire in comfort and have no plans to buy a seat on a yacht or Elon Musk’s Starship. I also worry that digital assets don’t provide the stability and steady returns needed to build a solid retirement nest egg.

Age and wisdom don’t always match

Caution in the crypto space is always recommended, but keeping people completely away from considering digital assets in their retirement portfolios is dangerous in itself. It discourages us from accessing what could be a solution to

Because the truth is the old way is not a safe bet either.Traditional pension funds are struggling.All but 12 of America’s 100 largest 401(k) funds Posted Double-digit losses so far this year, thanks to rapid inflation and a turbulent US stock market. At the same time, inflation weakens the purchasing power of cash while interest rates remain spectacularly low.

Even the real estate market is not a “sure thing.” Many speculate a housing bubble for reasons such as China’s real estate giant Evergrande nearing default. Property ownership is increasingly seen as a pipe dream for younger generations.

Related: Early Retirement with Crypto?playing with fire

Thus, it becomes clear that purely sticking to the old ways, including traditional financial products and outdated banking systems, is not viable for those who want forward-looking retirement savings.

Cryptocurrency is becoming a retirement planning opportunity

Inflation is no longer ‘temporary’ as US inflation approaches a 40-year high. Instability is also becoming a semi-permanent fixture in light of the global turmoil surrounding climate change and Russia’s invasion of Ukraine. It’s hard for anyone to know what the future holds, including pension funds, so people should be free to bet where they see fit, including their retirement plans.

For example, stablecoins are can Be a discreet addition to the 401(k). It’s about choosing the right kind: one that can store wealth and prevent the negative effects of inflation. were inherently vulnerable to On the other hand, stablecoins backed by physical assets such as gold have great potential as a store of wealth.

Gold has weathered many economic crises far better than stocks, bonds and fiat currencies. For example, in 2021, with the pandemic destabilizing fiat currencies around the world, the price of gold will remain stable between $1,700 and $1,950 an ounce, with both its stability and value increasing. Proven.

To put it into perspective, in the years since the gold standard was dropped, the value of gold has increased by more than 500%, and central banks have confirmed that reserves remain plentiful. But it’s only now that gold has been digitized, infinitely more accessible, and easier to buy and trade in smaller denominations. , even notes that it has the lowest correlation to inflation among existing asset classes. Rather than simply offsetting that impact, gold has remained positively correlated with rising inflation, achieving an average annual performance of +10.6% over the past 50 years. Gold has performed well during periods of high volatility and bear markets, sometimes even outperforming the stock market.

Governments have a role to play in encouraging our economic relief

Let’s face it. Retirement is a daunting prospect, and growth, protection and liquidity in the economic environment are becoming increasingly difficult to find. Americans looking down the line towards increasingly remote contingencies are right to think conservatively. But they must think conservatively in a way that embraces the future.

Investing in digital gold is the ultimate “future conservative” investment that combines the best of both worlds: the historical backing of traditional currencies and the flexibility and autonomy of decentralized, blockchain-based digital currencies. It’s movement.

Governments need to recognize the potential of these assets and provide cross-border oversight, rather than limiting investor options or scaring them into anti-change mindsets We need to promote greater transparency and enable investors to achieve financial freedom by providing a safe environment. .

The global economy is evolving towards alternative assets. Retirement benefits are no exception. Individuals cannot afford to exclude alternative assets from their retirement plans. Especially when inflation has already reached your hard-earned savings. It’s time for everyone to take control of their wealth and look to better, safer and fairer alternatives to the status quo.

Opinions expressed are those of the author and do not necessarily reflect the views of Cointelegraph. This article is for general information purposes and is not intended, and should not be construed as legal or investment advice.


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