Retirement savings can be challenging. As you reach retirement age, you want your nest egg to grow, so your life can be comfortable and stress-free.

Temptation To Invest For A High Return

Trendy investments, such as in Bitcoin and other forms of cryptocurrency, may seem like the way to go to crank up your Individual Retirement Account (IRA) balance in a jiffy. But, while younger savers can and should include some amount of risk in their retirement savings, Bitcoin may be too turbulent for any nest egg.

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Bitcoin is extremely volatile. Its price famously exploded in December 2017, doubling overnight to near $20,000 per coin, only to spin down to around $6,000 in February 2018. It has bounced between that low point and $10,000 for most of 2018.

Bitcoin is Still in its Infancy as an Investment Vehicle

While IRAs can include Bitcoin, right now this can only be done through self-administered accounts. This means that in addition to its roller-coaster price exposure, an investor has to take on custodial duties to add Bitcoin to an IRA.

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While working a little bit for the good of your retirement is not always a bad thing, self-administering your IRA can make your savings less efficient.

Self-Directed IRAs can be More Expensive

Time-honored sage investment advice is to diversify, stick to market index funds and minimize fees and costs. Bitcoin IRAs can throw a couple of wrenches into this plan. Its price does not follow market trends, and in a self-directed account, fees will likely be higher.

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There are, however, some potential benefits of investing in Bitcoin. Volatility means a possibility of a massive price spike, that might coincide with cashing out your IRA or conversion of the coins into another investment.

But, again, some advisors believe a Bitcoin crash is imminent, due to the currency’s highly-speculative nature.