Better late than never, right?

Three-quarters of retirees surveyed by the Transamerica Institute regret not saving earlier in their lives and wish they had saved more after they eventually got started. It’s no wonder, then, that many are seeking new potential sources of wealth creation ahead of retirement. For an increasing number of people, cryptocurrencies fit the bill.

“We’re seeing significant interest among people aged 45+ looking into crypto investments,” said Ryan Horst, CEO and co-founder of the cryptocurrency investor education service Altcoin Pro. “Many of them have significant wealth and a lot to lose, so it’s really important that they know what they’re doing.”

Financial advisors told Retirement Upside that trying to “catch up” with crypto has some merit, but most voiced significant caution about the risks involved. When evaluating the inclusion of digital assets like bitcoin in a client’s portfolio, the decision depends on the specific client, their goals and their risk tolerance. There is no perfect asset or allocation, advisors agreed, and not everyone is suited to be a crypto investor.

Crypto Cautious

“I’ve seen more clients over 45 interested in crypto, especially those who feel behind on retirement,” said Joon Um, tax advisor at Secure Tax & Accounting. “The danger is treating it as a shortcut to catch up. Crypto can offer growth, but it is highly volatile. I would keep it as a small, speculative part of a diversified retirement plan.”

Kevin Feig, founder of Walk You To Wealth and former head of risk at the crypto exchanges Coinbase and Kraken, agreed. “While there are a lot of digital assets available, most are simply noise,” he warned. “They aren’t one-size-fits-all, and most have drastically different use cases and profiles.”

Bitcoin and ether, for example, are often linked in news articles because they are the largest by market cap, but they have very different characteristics:

• Bitcoin, for example, is best explained to clients as a collectible: If there’s no demand, there’s no value.
• Ethereum, on the other hand, is essentially a tech platform that enables fast, low-cost transactions via decentralized financial systems.

“You want to understand why you are holding any digital asset and how it fits into your overall portfolio,” Feig said.

Crypto Skeptical. Not everyone is open to using crypto in retirement portfolios. Monica Dwyer at Harvest Financial Advisors thinks it’s a “very bad idea.”

“You think that if you just put your money into this risky asset that you can cross your fingers and hope that it provides you the retirement lifestyle that you dream of but haven’t been able to save for,” Dwyer said. “Don’t invest in risky assets just because you didn’t save enough yet. Buckle down, reassess your ability to spend less and save more. The real magic happens when you change your lifestyle and assess what is truly important.”

What if the biggest mistake in wealth management isn’t how people invest or run their family businesses, but how long they wait to enjoy the fruits of their labor?

That’s the perspective of Andrew Connors, senior wealth advisor at Hightower Signature Wealth, who helps families navigate major life and business transitions with a focus on balancing their finite resources of time, wealth and health. In his experience, clients who are most successful on paper tend to accumulate more wealth than they ever expected, but by the time they’re ready to enjoy it, their time and health have diminished. That insight has reshaped how he advises clients, including by moving beyond traditional returns-driven planning toward more intentional, life-centered decision-making. He suggests other advisors do the same, because the results have been both personally and professionally fulfilling.

“I’ve got a client now who’s retiring at 60 and leaving a lot of money on the table, but he wants to spend more time with his family,” Connors told Retirement Upside. “I’m honestly proud of him. It’s not easy to walk away from a big paycheck like that.”

A Different Kind of Planning

Connors boils his planning philosophy down to a simple idea: If the answer to “what is your personal benchmark for success” is a number, that’s the wrong perspective. The answer should be: What does that number allow me to do?

“It’s important to instill this philosophy as early as we can in the wealth accumulation journey for these highly successful people,” Connors said. “A lot of people just keep their head down and they eventually get to a point where they’re in shock at what they have accomplished financially, but they look back and wonder about what they sacrificed in terms of time and health to get there.”

Sadly, many people in this situation end up feeling more regret than accomplishment. They also often realize that they’ve done nothing to prepare their kids and future generations to inherit great wealth, resulting in added personal stress and heightened familial tension.

“One of my clients is a father who started a family business and sold it for a huge sum of money,” Connors said. “We’ve had meetings where he has been brought to tears wondering if selling the business was the worst thing he could have done for his family. It’s a real shame to see people in that situation.”

A Better Way. These situations aren’t always avoidable, Connors said, but frank conversations between advisor and client can do a lot of good. One strategy is to help clients recognize where they are in the wealth accumulation journey. It’s one thing for a 30-something to focus intently on building their career and financial foundations. Later, income and wealth grow, but the trade-offs can intensify as people continue prioritizing accumulation. Without guidance, many people delay important decisions and conversations until a life event forces their hand.

No one wants to be stuck in the middle.

Retirees are increasingly relying on their adult children in old age, which could inadvertently affect the next generation’s savings, a new study from the Center for Retirement Research found. The median combined amount in 401(k)s and IRAs in 2022 was $204,000 for working households nearing retirement that have a 401(k), suggesting that as the average American lives longer, more will turn to their children to make ends meet after leaving the workforce. This could have significant implications down the line for the so-called “sandwich generation,” who are tasked with caring for both their own kids and their aging parents, said Fred Barstein, CEO of The Retirement Advisor University.

“On the one hand, they’re taking care of kids, sending them to college. On the other hand, they’re taking care of parents and helping them. It puts a lot of stress [on adult children],” Barstein said. “Ultimately, it hurts their retirement.”

Sandwiched In

Working-age children with retired parents, typically members of Gen X and older millennials, face varying degrees of financial strain. While the well-off may not have to deal with the immediate consequences of helping older parents because they have more resources to begin with, they’re still allocating fewer savings to retirement and housing, assets that could be less readily available if a parent has an urgent financial need. Because of this, “children may purposely be saving more in assets that are readily accessible,” the CRR report states. “Every dollar that they have to spend helping their parents is one that they potentially can’t invest in their own retirement,” Barstein said. “Life gets in the way.”

Other findings from the report include:

• Black and Hispanic people who support their parents tend to have less retirement wealth and total wealth; older people of color are also more likely to receive assistance from their children.
• Thirteen percent of adult children in the US provide financial assistance to parents who are not living with them, a likelihood that increases with the adult child’s income.

Making Ends Meet. There are several potential causes of the rising percentage of Americans supporting their parents in retirement: skyrocketing healthcare costs, rising life expectancy, inadequate personal savings. But Americans’ expectations about what their children will do to support them in retirement are also at play, Barstein said. “Most people feel like they have to pay for their kids’ education … and then take care of their parents if they haven’t done it,” he added. “I think it’s a very big problem.”