Should your pension be paid in crypto or local currency?

Do you sometimes feel pathetic towards retirees because you think they are a little poor? Some of them might be, and in 20 years you would like your pension paid out in crypto. I do not want you to regret it, so I will explain.

Your pension is the amount that both the employer and the employee pay into an account where the employer pays the highest amount, which shows that they care about life after retirement for you. Unless you are earning in foreign currency, this amount is usually paid out in your local denomination.

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This means that your pension and your future plan are linked to the development of your country’s currency. Now you should start thinking about the various economic and non-economic policies that can affect your currency, such as devaluation and depreciation. Both do one thing: reduce the value of the local currency and thus create inflation. People realize that there is inflation where the local currency reduces its purchasing power. The word on the street is that things are expensive. This automatically affects every investment or asset you have in your currency, including your pension.

A conscious look at retirement investing.

If you are so lucky, your employer can commit to paying in your entire pension. Typically, the pensions you pay (8% of your salary) and your employers (10% of your salary) go into an account called a pension fund and are monitored and managed by pension managers and advisers. They not only save your money, but promise a percentage that is compounded over a period of time. The return is quite competitive between different pension fund managers. Sometimes the yield can reach 20%. In 2021, however, the average return was between 5 and 8%.

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Source: https://www.pensionnigeria.com/pension-news/performance-of-all-pfas-in-nigeria-for-full-year-2021/

This is after these pension managers have invested in government bonds, the Nigerian stock market, the local money market and mutual funds. Now you should be interested in knowing your pension manager’s returns. Many employees passively receive their warnings every month and are less concerned about their health. You should be.

Is crypto good?

In a situation where a country is struggling with double-digit inflation, you can assess your return on investment and predict whether your investment in retirement is really worth it, or whether you are losing as much money as you are gaining. What if your pension is paid in Crypto as USDT, which is a stable currency and linked 1: 1 to the dollar? This means that your pension is protected against devaluation or impairment of currency. Meanwhile, Bitcoin has experienced a 5-digit growth since 2009. What if your pension was paid out in Bitcoin? Some may even retire because of the kind of returns their pension would have earned. However, there are rules that govern workplaces that may not be immediately possible to implement.

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What can you do?

If you are lucky enough to work in companies that respect the pension rebate scheme, that’s fine. After seeing the limitations of this plan, you need an alternative investment in the form of crypto. A good place to start is to have the Yellow Card app (available on the Google Playstore and Apple App Store), which offers the easiest interface to understand when buying cryptocurrencies. After registration on the app and completed all necessary checks. Start by saving half of the amount paid into your pension fund in USDT or 9%. Or you can go further to buy Bitcoin, which has shown no signs of slowing down since the start of 2009. When you compare your retirement returns with this a few years from now, you will want to add more money by buying assets cryptographically.

Author
Timothy Ukaegbu

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