Financial Experts React to Rise in Crypto Retirement Plans

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Cryptos are inching their way into mainstream investing, and the next frontier is retirement plans. While advisors remain cautious on digital assets, it seems that they may be shifting to embracing them due to client demand, according to a new survey.

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The Trends in Investing survey by the Financial Planning Association found that 14% of advisors currently use or recommend cryptocurrencies with their clients — up from less than 1% in 2020. Meanwhile, 26% said they plan to increase their use or recommendation of cryptocurrencies in the next year — up from a fraction of a percentage of respondents in the 2020. In addition, the survey notes that 49% of respondents said their clients have asked about cryptocurrencies in the past six months.

Financial advisors are taking notice of the interest, as retirement plans represent a huge target: Investors currently have $22.5 trillion tied up in IRAs and 401(k)s, according to The Wall Street Journal.

Bitcoin IRAs or crypto IRAs are sprouting up everywhere, but the Motley Fool warns investors to make sure they consider the hefty fees of investing in a Bitcoin IRA against the tax advantages. “Many charge setup fees, maintenance fees and transaction fees, plus they often have significant account minimums,” according to the report.

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Ric Edelman, founder of advisory firm Edelman Financial Engines, LLC and financial adviser education group RIA Digital Assets Council, tells GOBankingRates that one consideration to take into account when looking at crypto IRAs is to be sure to select a qualified custodian.”Some IRA custodians in the digital asset business are not qualified — meaning they have not been licensed by federal or state regulators,” Edelman said. “Only qualified custodians are required to adhere to regulatory standards and are subject to inspection and audit by regulators.”

Earlier this month, retirement investment platform ForUsAll partnered with Coinbase to offer employees exposure to cryptos, in what the company said is a first of its kind. “For too long, too many Americans haven’t had the same access to alternative investments that wealthy and professional investors have had,” Jeff Schulte, CEO of ForUsAll, said in a statement. “Our mission is to provide every American with the tools necessary to build a brighter financial future, and making these alternatives more readily available is a key step towards that.”

Retire Comfortably

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Due to their inherent volatility, not everyone is in favor of adding cryptos to retirement plans. Bitcoin, for example — which stands at $36,000 today — is down almost 50% from its high of $65,000 in April.

Howard Dvorkin, CPA and Chairman of, tells GOBankingRates that he “can’t think of anything more ridiculous than adding crypto currency to a retirement portfolio.”

“The whole point of retirement investing is to ensure it’ll grow over the next several decades. Cryptocurrency is still in its infancy. Maybe it grows up to be big and strong — or maybe it doesn’t grow up at all. Remember the adage to never invest money you can’t afford to lose? Retirement savings are the very definition of money you can’t afford to lose.”

See: Citibank Enters Crypto Space, Launches Digital Assets Unit
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Dvorkin adds that investing in crypto currency is akin to investing in a startup business. “I’ve done that many times, he said. “Most startups fail, but the rare one that succeeds pays for all the flops and then some, but I’d never do that with my retirement accounts. There’s no track record by which to measure the risk, and there’s no guarantee crypto currency won’t morph into something else completely well before you retire.”

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Last updated: June 29, 2021

About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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