Blockchain can provide a mechanism for saving for retirement that is transparent and one in which the savers have more control. Last year in July the National Retirement Index reported that more than 50% of working-age households were in danger of not being able to maintain current standards of living once in retirement. Even more troubling is the fact that savers have little or no control of their retirement plans.

One of the advantages that blockchain offers is that the information of savers is well-guarded and encrypted. Thus bringing a portfolio to the blockchain poses no danger. When this aggregation of portfolios, be they bond, equity, 401Ks or IRA is done, savers are able to see all the figures and numbers in one place and thus have a better understanding and picture of their financial future for the long term.

Decentralized database

Blockchain is also decentralized and this ensures transparency. Thus individuals are able to understand how their own funds are structured. When the access barrier is removed between the individual and the retirement account, the individual can undertake daily planning that is more intelligent and suited to their needs.

The blockchain technology could also assist retirement savers with regards to risk management. This way tailored analytics that are based on the kind of portfolio that a particular investor has set up would become available through blockchain. Consequently retirement savers would be in a better position of making informed decisions as their knowledge would have been greatly expanded. Blockchain technology would also provide savers with their portfolio’s digital history. This would give a reference should the need arise.

Smart contracts

Some retirement planning firms are also developing smart contracts for retirement savers where pension plans are configured in such a way that payments are only made when certain previously defined conditions are met.

There are also millenials who are already using blockchain for retirement planning by investing in cryptocurrencies. The Bitcoin IRA has for instance crafted Bitcoin (BTC) funds.

LEAVE A REPLY

Please enter your comment!
Please enter your name here