Run …run far, run fast, run screaming, but run.
Forgive a bit of pearl-clutching, but pitching Bitcoin as a way to regain retirement plan control is like giving pilots alcohol to regain altitude, with the same disastrous results.
Yet pitches are what we’re getting, and plenty of them.
We understand a lack of transparency is a legitimate defined-contribution gripe, especially with fees and expenses, but this is beyond the pale.
For decades, John Bogle has regularly espoused the importance of avoiding the “hot, new thing” in retirement planning, and his message just went into hyperdrive.
We also get the need for longer equity allocations, predicated on longer lifespans to ensure assets last, and we break with Bogle on the efficacy of things like EFTs, but Bitcoin is a whole other level.
It’s especially concerning with millennials, those drawn to the associated technology play and who might remember 2008 but not its underlying causes.
The larger issue, of course, is the general dearth of understanding, urgency and therefore participation in employer-sponsored plans, one reason financial wellness is all the rage. Tough enough to get participants to comprehend compound interest and a simple 60/40 stock-bond split, now add Bitcoin to the mix.
Part of it is the dream to be the next Zuckerberg (or Winklevoss). Millennials regularly rip money as a measure of success, preferring to concentrate on the impact they can make on the world around them. Noble in theory, but a killer for any semblance of retirement planning discipline.
The saving grace is the time—somewhat—they have in which to recover.
It’s been proven repeatedly how ungodly unsophisticated we are in market movements and the multitude of influencing variables therein. Adding Bitcoin to the retirement mix makes it exponentially worse, and (I can’t believe we have to say this) should be rejected outright.