Suze Orman says keeping cryptocurrencies in a retirement account is a big mistake. Here because

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It could be a move you greatly regret.

Key points

• Many people like to invest in cryptocurrency.
• Because it’s such a speculative investment, it may not be the best fit for your retirement savings.

While it’s been a tough year for cryptocurrency, many investors are still eager to put money into digital coins or keep the digital currency they bought last year. If you are interested in buying cryptocurrency, it is fine to do so as long as you understand the risks involved and proceed with caution. This means don’t invest 80% of your money in cryptocurrencies, but rather start small and see how it goes.

But if you ask Suze Orman, she’ll tell you that investing in cryptocurrencies for retirement is a really bad move. And it’s advice worth listening to.

An asset too speculative

You’ll often hear that it’s smart to consistently fund an IRA for retirement so you have money to put to use later in life. And you don’t want to just leave your retirement savings in cash. Rather, you should invest that money so that it can grow into a larger sum over time.

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

But if there’s one asset Suze Orman would warn retired savers to stay away from, it’s cryptocurrency. The reason? It is highly speculative.

Cryptocurrencies have proven to be very volatile, but again, so are 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 will still be a valuable asset a decade from now.

It’s easiest to determine the value of a particular stock based on information about the company behind it—that is, by looking at that company’s assets, cash flow, products, and so on. It is more difficult to understand how much cryptocurrency is worth and how much 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 cryptocurrency payments today. But for the most part, you can’t just pay in crypto the same 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 doesn’t become a mainstream payment option in the future, its value could plummet.

We also don’t know to what extent cryptocurrency will be regulated over time. This also increases the risk of possessing it.

Consider cryptocurrency as a short-term asset

As a general rule, it’s a good idea to load your portfolio with quality investments that you hold for a long time. But cryptocurrencies may be the exception to the rule. It might be a better bet to think of cryptocurrency as a short-term asset and stick to more tried-and-true investments for your retirement nest egg.

You will need a significant amount of savings to cover your living costs once your career ends. And you don’t want to risk your future financial security by betting too much on cryptocurrencies.