With cryptopension to a brighter future

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More and more young inhabitants of the planet understand that it is time to think about life in retirement right now. As time has shown, counting on the state in this matter is frankly not the best idea. As cryptocurrencies become more and more integrated into the global financial system, the idea of ​​accumulating a “pension reserve” in this form of digital money is growing in popularity.

Let’s see what is a cryptocurrency pension? What are its advantages, what are the disadvantages? And in general, how popular is this type of pension savings in the world and what is its future?

What is cryptopension?

As you know, there are 2 types of pension systems: funded and solidary. In the first case, the employee himself makes contributions to the future pension. And in the second, it is paid from the taxes of those who, many years later, will begin to receive their pensions from the taxes of the next generation of workers.

In most countries of the world, the current pension system is a combination of two types – funded and joint. As a rule, the solidarity part is payments guaranteed by the state. Usually they are not very large. Most of it is funded payments.

Until recently, all payments for solidarity pensions (from fundraising to payments to pensioners) took place exclusively in fiat currency. The accumulative system worked somewhat differently: in addition to receiving and accumulating, there was an intermediate stage – investment.

Those. until retirement, all employee contributions are not just in the bank, but are invested in various financial instruments: real estate, securities, precious metals, etc. This allows you to receive 2-3 times – or even more – profits than when opening a bank deposit. The increase in the amount of savings at the time of retirement depends on the success of the investment strategy of the non-state pension fund.

The emergence of cryptocurrencies has made it possible to officially use them on a par with traditional financial instruments. This was also facilitated by the development and implementation of legislative regulation of the cryptocurrency market in developed countries. Investments within the framework of accumulative pension programs have also become topical.

It turns out that a cryptocurrency pension is formed as a result of investing pension savings in cryptocurrency assets. It can be paid both in cryptocurrency and in fiat money after automatic conversion.

Let’s try to objectively assess the potential pros and cons of crypto-pensions.

Benefits of retirement savings in crypto

The advantages of savings in cryptocurrency include:

  • Deflationary model of top cryptocurrencies. Unlike fiat, the algorithm for the functioning of crypto money provides for a limited number of them. There is no way to “print” new ones (in addition to those already available). This means that as users increase, the cost will only increase. Which is perfectly confirmed throughout the history of the existence of the crypt: gaining more and more popularity in the world, the price of the cryptocurrency reaches new highs during periods of market recovery. In times of recession, the average cost is also significantly higher than in previous years.
  • More and more investors are choosing cryptocurrencies as a “safe haven” in times of economic crisis.
  • An impressive long-term profit margin that no traditional financial instrument can provide.


Of the shortcomings, it should be noted:

  • High volatility of cryptocurrencies. The price can fluctuate by 10-20% per day.
  • In case of fraud, hacking, erroneous transfer, it will be impossible to return the funds.
  • The uncertain status of cryptocurrencies in many countries.
  • Insufficient awareness of the population in matters related to the principle of operation of cryptocurrencies, their circulation and use.

Investment crypto pension programs in the world

Despite the concerns of regulators in many countries regarding the crypto market, there are already real examples of the use of cryptocurrencies as an investment tool for the formation of future pensions.

An example is Hong Kong, where back in September 2019, for the first time in the world, a pension accumulation program exclusively in cryptocurrencies was launched. The unusual service can be used by working citizens of the country, entrepreneurs, companies. The pension account is replenished both with the help of voluntary contributions and directly from the monthly salary.

And the Venezuelan government has transferred all the pension savings of citizens into the national cryptocurrency El Petro.

In May of this year, Bitwage partnered with cryptocurrency exchange Gemini to add a new 401(k) Bitcoin retirement plan. True, not all funds from the pension account will be invested in cryptocurrency, but only a part of them – as an addition to traditional instruments.

Interesting to know:

401(k) is the most popular plan in the US pension system. It provides for an employee to contribute part of their salary before income tax to a personal retirement account. At the same time, the employer can – if desired – also contribute a certain amount to the same account (usually it is equal to the amount of the employee’s contribution). Such deposits are not taxed. For his part of the contribution, the employee receives the right of ownership immediately after making it, and for the part made by his employer, only after 5-6 years. The average 401(k) investment return is about 9% per year. This plan is prepared by the employer.

The second most popular is the IRA pension plan. In this case, the employee himself performs all the duties of issuing an account. He also independently determines the amount of monthly deductions (no more than $6,000 per year). At the same time, such a plan is considered income and is taxed – either after the account is closed (retirement) or before it is opened.

The distribution of roles in the new plan from Bitwage looks like this:

  • the company itself ensures the development of a 401 (k) plan for a particular enterprise and its practical implementation;
  • Gemini is engaged in the exchange of incoming fiat funds for cryptocurrencies at the exchange rate on the date the money was credited.

A similar service was introduced just a week ago by Digital Asset Investment Management – it has a license to conduct operations with cryptoassets. The company offers its clients several options for the 401(k) pension plan at once, differing in the amount of investment risk and the share of deposits in bitcoin (up to 10%).

In the CIS countries, unfortunately, the funded part of the pension system is poorly developed. And there is nothing to say about cryptocurrency projects in this area. Those who work today and want to save their pensions in cryptocurrencies are left to do this on their own, at their own peril and risk.

It is much easier for workers in Europe and the USA to do this. In these states, professional managers will be responsible for their income, and financial regulators will strictly monitor the observance of the interests of each worker.


Cryptocurrencies have an incredible future. This is evidenced by the results of market research. So, according to the report of the investment company River Financial, the number of its clients investing in crypto is increasing almost 2 times every month. Moreover, most of them are people over 55 years old. It is in cryptocurrency that they see an opportunity to save pension savings during the economic crisis caused by the pandemic.

The survey revealed some interesting facts:

  • Millennials (ages 25-36) are ready to cut spending 20% ​​a month right now in order to receive a higher pension in old age.
  • Generation Z (18-25 years old) are ready to cut operating expenses by 15%.
  • The older generation (45+ years old) agreed to reduce expenses by 10% and allocate free funds to funded pensions.

The number of new types of pension programs will steadily grow, as will the scope of explanatory work with future retirees about the benefits of crypto pensions. The number of those who use such a service will increase by an order of magnitude. And the potential of the new market is simply huge.


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