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Traditional means of saving, investing, and even retirement plans, are starting to show cracks in the present day and deeper into the future. Negative interest rates are threatening to destroy savings, while it has been reported that even $1 million in retirement won’t be enough. Could serve as a hedge?
These troubling times for the future of savings and money mean people need to start looking to alternative means to ensure their savings firstly survive and are not impacted by poor monetary policy, and then have a chance to grow. To this end, many are looking to what has been dubbed the future of money: Bitcoin.
For retirement nest eggs, the generational gaps are showing that $1 million in the bank – which was the gold standard for retirement funds – will no longer be enough to support a person in their later life. The advice is, unhelpfully, “earn more or spend less,” but perhaps it should be “Buying your first Bitcoin can be an intimidating but highly rewarding process for new users. Therefore BeInCrypto has created a... More.”
These days, a $1 million retirement nest egg is not even close to enough. https://t.co/eDDIkxmLBv
— CNBC (@CNBC) January 26, 2020
Mark Avallone, president of Potomac Wealth Advisors, has outlined how from boomers to millennials, the value of a $1 million nest egg in retirement has drastically changed.
Avallone explains how 67-year-old baby boomers, retiring now with $1 million in the bank, will generate $40,000 a year to live on adjusted for Most people who know anything about the economy have heard the word inflation. It is usually thrown around as a... More and assuming a sustainable withdrawal rate of 4 percent.
With a million dollars in the bank, a 42-year-old Gen Xer will only generate an inflation-adjusted $19,000 a year when they end their working career, and all is said and done. What is even more concerning is that a 32-year-old millennial planning to retire at 67 with $1 million would live below the poverty line.
The correlation between the dire financial future for millennials and their appreciation of Bitcoin and the evolution of the financial space is not too surprising. For the millennials, looking to their retirement and faced with negative interest rates, another financial crisis, and the relatively pointless advice of “earn more or spend less,” Bitcoin is far more welcoming.
Generally, people have been advised against investing in Bitcoin for their retirement as the asset is widely volatile and still relatively untested, having only been on the market for about ten years. More so, the up and down nature of Bitcoin means that its booming start as an investable asset may be over as it slips into parallel trading or slow decline.
“You can jump on the train when it’s already leaving the station, or you can be the person in first class, waiting for things to get going,” Jay Blaskey, the digital currency specialist from BitIRA, said.
Still, Bitcoin as an alternative for millennials looking to their retirement may become an undeniable reality. Around them, the value of the dollar is depreciating, interest rates are falling, and the only asset that has shown prominent growth in the last decade is Bitcoin. Forced into Bitcoin, the snowball effect may well be a booming industry that helps the asset legitimize itself as one for the future.
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