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How can crypto work as your saving funds for future

27 Jun 2022 By : Somesh
How can crypto work as your saving funds for future

Retirement is the term is used for vacating the work-life to live comfortably and enjoy, rest, and travel with your family and friends. Planning for retirement at an early age can help you be free from paying bills and start living higher goals. There are eclectic methods by which you can start investing for your post-retirement life using the effects of long-term compounding. To store the required amount for retirement and live without worrying about income, starting an investment at an early age is the way to go. The earlier you start, the more you save over time.

Amongst the major investment classes, cryptocurrency is evolving as a significant space with the right future potential. However, balancing your portfolio along with the right risk assessment can allow you to incorporate cryptos and leverage their future potential. 

In this Crypto and retirement guide, we will find out what are various ways to plan for retirement and check for the new currency and how it will shape the future if we invest in it. 

What is a Retirement funds Plan?

  • Individuals should create passive income sources to not run out of money after retirement.  

  • You need not rely only on the national pension schemes as they are lesser in number and insufficient for a better tomorrow. 

  • The rupee today will not remain of equal worth tomorrow if we bear a 6% inflation rate in mind. To fight inflation, you must invest in something that can give you more return than the annual inflation rate.

  • Excessive expenditure today will o

  • Retirement’s primary goal is to free you from the workloads and to take care of your health. After retirement, you can live independently without worrying about your income. 

    And an early investment is the key to a comfortable after-retirement life.

    A retirement plan is a lifelong strategic investment for you to be a wealthy senior citizen. A retirement plan involves at what age you want to retire, how much worth do you possess right now, and how many savings you have to invest for your future? Investment for retirement starts from what position you are in. How much do you earn and how much of your earnings can you invest in the future? Aside from the investment planning, 

    • nly increase the liabilities of tomorrow. However, spending as per your needs will keep your account balanced.

    • The earlier you start investing, the higher will be your compounding returns. 

    How Much Money Will You Need for Retirement?

    Let us see how you can estimate future figures with some calculations using some of the most common and simple methods to decide on retirement funds. 

    The money you will spend

    You must list down all the requirements that you will face right after retirement. Do not underestimate or overestimate your post-retirement needs, but you must have a flexible hand over them to be on the safer side. List down all your requirements such as:

    • Medical expenses

    • Emergency Funds

    • Tax payment

    • Inflation

    • Home Management

    Size of the Corpus

    Corpus is the financial term for capital or funds held for the existence and sustenance of a particular project. After you have estimated the annual requirement, it is time to estimate the size of the retirement corpus. You can do that by using the formula mentioned below:

    Size of the Corpus = Annual requirement/investment Yield 

    How many years you will live

    This is an unpredictable question that no one can answer. No one can estimate the numbers of years you are going to stay alive. But you can go with the average human life expectancy. A statistical analysis revealed by scientists of the International Institute For Population Studies (IIPS) in 2020 suggests the life expectancy of men and women in India is 69.5 and 72 years, respectively.  Using this information you can plan your retirement funds ahead.


    Once you have calculated the size of your corpus, you can also estimate its future value after applying a 6% inflation rate. It is up to you how much time later from now you are planning to retire. Let us suppose this number is ‘n'. Then the inflation on the corpus after n years will be, 

    Corpus (n) = Corpus (today)* (1+6%) ^n

    Is It Safe To Keep Crypto As Retirement Savings?

    The answer to this question depends on your faith in cryptocurrencies and the upcoming Metaverse. As we know, cryptocurrencies are decentralized and unregulated digital assets. The blockchain and the cryptocurrencies are the exact opposite of the centralized and the fiat currencies. Cryptocurrencies are still under adoption and contains a lot of potential to grow even further. But as the crypto market is falling and rising every other day, should it be there in your long-term portfolio?

    Although the financial institutions are permitting the employees to invest pre-tax earnings into the 401K federal scheme, you can invest start some micro investments in ‌‌crypto and continue doing it for a longer duration. 

    Bitcoin skyrocketed in its price to $69,000 in 2021 after one decade of its birth. Financial institutions will now allow the employees to invest 20% of thier funds in bitcoin in 401K plans. But even after such hikes, crypto is a volatile market in which you should not invest the maximum portion of your life savings. Digital assets also includes special care in terms of the digital security. You can read more about it on Coingabbar blogs. 

    Cryptocurrency can be a good retirement investment and generate more income than any traditional streams but you have to understand that it is a riskier investment. As people grow in their age, their risk appetite shrinks so they would not want to tackle risks when they want to enjoy their lives. However, a negligible share of your monthly investments, if invested over a long period of time can create a sizeable crypto portfolio for you. 

    Things to Keep in Mind While Investing Long-term In Crypto

    Youngsters have time and a higher risk appetite than our senior citizens. Cryptocurrency can be a better investment  for young minds than those who want to live comfortably in their non-working days. But if you want to hold some cryptocurrencies in the long run, here are some points you should remember. 


    Cryptocurrencies are volatile assets by nature, attracting all sorts of investments unders their umbrella. With multiple factors affecting their prices and most of the projects being really young, it is hard to figure out the right coin to invest in. Retirees must do research and make a critical analysis of the asset they want to invest. Analysis based on the historical performance of coins and the future price predictability can help them understand if the coin is for them. 

    Risk Appetite

    You should know how much risk you can bear until your retirement fund matures. You must know all the risks involved while investing in a particular coin and all the investment parameters, such as exchange, malfunctioning, scams, stealing, and volatility. Once you will have a clear understanding of your risk-taking abilities then only you would be able to invest in crypto without worrying about market fluctuations. 

    Understanding Crypto

    You need not be a master in crypto assets and blockchain businesses. But it is essential to know the key features and core of your investment portfolio. Crypto is a digital concept that needs no centralization while functioning on its own. The price of digital assets depends on the market demand and if the requirement of a coin is at a peak, the prices are likely to rise and vice versa. 


    In the end, we would like to remind you of the risks involved in investing in cryptocurrencies for your retirement. Countries have adopted cryptocurrencies as a mode of value transfer on the micro-level. The United States is allowing citizens to invest in Bitcoin and the rest of the altcoins with the 401K plan. However, cryptocurrencies are not reasonable assets as a retirement investment if this is the only mode of investment you are making. You need to combine different investments together to create a bucket of investments and hold it for a long time. Other investment methods for senior citizens include bonds, traditional stocks, exchange-traded funds, mutual funds, and real estate. To read more about cryptocurrency you can visit Coingabbar blogs