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Is cryptocurrency your path to retirement?

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Most employer-sponsored 401(k) plans offer a limited menu of investments to choose from and don't allow participants to invest in cryptocurrencies.

How to invest in cryptocurrency for retirement

Being able to invest in cryptocurrency in a 401(k) plan may be possible, but it's uncommon. Most employer-sponsored 401(k) plans only offer a limited menu of investments selected by a registered financial advisor. These investments are almost always publicly traded mutual funds and ETFs.4

If you want to invest in crypto within a tax-advantaged retirement account, you can use a self-directed IRA.5 Self-directed IRAs allow you to invest in a broader range of assets, including limited partnerships, real estate, precious metals, cryptocurrency, and other alternative investments.

To open a self-directed IRA, you need to work with an IRA custodian that handles this type of account and be aware of the potential downsides,5 including:

  • Higher fees.
  • Custodians aren't allowed to give financial advice or make investment recommendations.
  • Complicated record keeping and tax reporting requirements.
  • The potential for IRS penalties if you don't follow the rules.

For these reasons, self-directed IRAs are usually only appropriate for very experienced investors or those with deep knowledge of the types of investments they're holding in the account.

If you're considering investing some of your retirement savings in cryptocurrency, keep in mind the number one rule of investing: Never put all your eggs in one basket. Cryptocurrency can make up a small part of your retirement portfolio, but don't go all in. And be sure to discuss the potential risks with your Synovus financial advisor.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Diversification does not ensure against loss.

  1. Gemini, “Correlations Within The Context of Cryptocurrencies," updated June 22, 2021, accessed December 7, 2021. Back
  2. MacKenzie Sigalos, “Bitcoin's wild price moves stem from its design —you'll need strong nerves to trade it," CNBC, updated May 20, 2021, accessed December 7, 2021. Back
  3. SIPC, “What SIPC Protects," accessed December 7, 2021. Back
  4. Adam Bergman, “Why You Likely Can't Buy Cryptocurrency In Your 401(k) Plan," Forbes, published March 17, 2021, accessed December 7, 2021. Back
  5. Rachel Hartman, “A Guide to Self-Directed IRAs," U.S. News & World Report, published May 12, 2021, accessed December 7, 2021. Back