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.
- 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.