Saving for rainy days entails saving for retirement for many. Years ago, $1 million in savings would’ve guaranteed a retiree’s comfortable living. However, reports reveal that the same value is only a quarter of what millennials need to survive presently. Bitcoin has, therefore, become a more appealing investment.
Gold Standard of Saving is Currently Inadequate to Support Retirement
CNBC’s 2017 report revealed that the gold standard of saving for a retiree was $1 million. If you’d saved that much your whole life, you could live comfortably with little or no worries afterwards. However, it’s 2020, the same cannot be said about millennials of this age. A million dollars is a quarter of what they need to survive when they retire as well.
Also, it was further discussed why $1 million retirement savings isn’t sufficient today. As outlined, a 67-year-old who retires with $1 million in the bank, will generate $40,000 yearly to live on. This is adjusted for inflation and a withdrawal rate of 4 per cent.
In contrast, a 42-year-old who retires in a few years, saving same amount will have an earning of $19,000 yearly. This is significantly lower. Also, low-interest rates are not incentives for people to save. This is because they may find close to the same amount they have left in their bank years ago.
Bitcoin’s Exponential Growth Could be a Better Saving Instrument
And then comes Bitcoin, a cryptocurrency whose value grows exponentially, and could double, triple, etc. its current value years from now. As of 2013, its price per coin was around $10. Nonetheless, it surged to $20,000 in December 2017. While it may have dumped significantly and is now priced at $9,300, it is a milestone away from its value years ago.
Consequently, the virtual asset has been used as a hedge in times of economic uncertainties. It has been advised that people earn more or spend less to live well after retirement, but Bitcoin offers another alternative. According to Thomas Lee, Head of Research at Fundstrat Global Advisors in a tweet on January 29, 2020, “Bitcoin is seen as a better safe haven, than Gold.
And more recently, Tim Draper, an American venture capital investor advised millennials to invest in Bitcoin to save enough for retirement. In the Bitcoin bull’s opinion, banks have left millennials in a lot of debt, which they can get out of by adopting an asset that is not limited by location or laws. Draper further noted that times have changed. As such, if the youths employ the same method of saving pennies occasionally, they will not create a successful retirement plan.