Should your pension be paid in crypto or local currency?

Do you sometimes look pitifully at retirees because you think they’re a little poor? Some of them maybe and in 20 years you would want your pension to be paid out in crypto. I don’t want you to regret that, so I’ll explain it to you.

Your pension is the amount deposited into an account by both employer and employee, with the employer paying the higher amount, demonstrating that they will take care of you after you retire. Unless you earn in a 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 evolution of your country’s currency. You should now 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 cause inflation. People realize that there is inflation where the local currency decreases its purchasing power. The word on the street is that things are expensive. This automatically affects any investment or assets you have in your currency, including your pension.

A conscious view on pension investing.

If you’re lucky, your employer can commit to contribute 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 administrators and advisers. Not only do they save your money, but they promise a percentage that is compounded over time. The returns are quite competitive between the different pension fund managers. Sometimes the yield can be up to 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 after these pension managers have invested in government bonds, the Nigerian stock market, the local money market and mutual funds. By now you should be interested in your pension manager’s returns. Many employees passively receive their monthly alerts and are less concerned about their health. You should be.

Is Cryptocurrency Good?

In a situation where a country is struggling with double-digit inflation, you can assess the return on your investments and predict whether your investment in retirement is really worth it or whether you will lose as much money as you gain. What if your pension is paid in Crypto like USDT, a stablecoin and pegged 1:1 to the dollar? This means that your pension is protected against currency devaluation or depreciation. Meanwhile, Bitcoin has been experiencing 5-digit growth since 2009. What if your pension is paid in Bitcoin? Some may even retire simply because of the kind of returns their retirement would have accrued. However, there are workplace regulations that may not be able to be implemented immediately.

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What can you do?

If you’re lucky enough to work at companies that respect the retirement discount scheme, that’s fine. If you have seen 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 Google Playstore and Apple App Store) which provides the easiest interface to understand when buying crypto assets. After registering on the app and completing all necessary checks. Start saving half of the USDT deposited into your retirement fund, or 9%. Or you can move on to buy Bitcoin, which has shown no signs of slowing down since its inception in 2009. If you compare your retirement return to this in a few years, you’ll want to add more money by buying crypto assets.

author
Timothy Ukaegbu

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