Bitcoin as a Retirement Account

[benjamindees]

Every month, your employer transfers Bitcoins into a time-locked address that can't be transferred out before you reach retirement age.  You have the key to the address.  You can verify the transfer on the blockchain.

No middle-men.  No funny business.  No brokers with pyramid/eyeball shaped logos.  No "oops we went bankrupt and lost your retirement."  No bail-ins.  No raising the age of retirement.

Just Bitcoin.

[1715195025]

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[TonyT]

Every month, your employer transfers Bitcoins into a time-locked address that can't be transferred out before you reach retirement age.  You have the key to the address.  You can verify the transfer on the blockchain.

No middle-men.  No funny business.  No brokers with pyramid/eyeball shaped logos.  No "oops we went bankrupt and lost your retirement."  No bail-ins.  No raising the age of retirement.

Just Bitcoin.

Why would any rational business person employer do such a crazy thing?  The whole purpose of a retirement fund is so that you can dip into it in times of need and/or siphon off the interest and/or play funny accounting games with the money in it?    Certainly the employees retirement is not first on the list.

[kolloh]

Yeah, this would not be wise. This locks you into one specific type of investment with no way to make modifications to your portfolio or take out a loan on your retirement account should you need to.

[qwk]

Every month, your employer transfers Bitcoins into a time-locked address that can't be transferred out before you reach retirement age.  You have the key to the address.  You can verify the transfer on the blockchain.

Intriguing, but probably won't fly.
All Bitcoin-Hype aside, for easiness' sake, let's assume we're doing this with our own, special coin, let's call it RetirementCoin(RC).

In the beginning, people will need a lot of RC to pay into the pension fund. RC is new, its price is low, i.e., for a given amount of e.g. US Dollars, you'll have to buy a lot of RC and lock them in your address. Exchange rate of RC will go "to the moon"™, leading to lower amounts of RC required to put into your retirement address.

The years go by.

Finally, when pay-outs start, huge amounts of RC from the first pay-ins will pour into the market, pushing the exchange rate down.
Your second pay-out will be substantially less RC at a substantially lower exchange rate. You'll be practically broke once you retire.

[jbrnt]

Finally, when pay-outs start, huge amounts of RC from the first pay-ins will pour into the market, pushing the exchange rate down. Your second pay-out will be substantially less RC at a substantially lower exchange rate. You'll be practically broke once you retire.

This is a very good point. It got me thinking. Is the above senario inevitable?

IF everyone uses this RC for retirement fund, the block reward keeps up with demand, than the market capital of RC would be huge AND price could be relatively stable. When the first wave of retirement plans matures, it's such a low percentage of the whole RC market, it may not affect the price signifcantly. There would also be a constant capital inflow from youngsters, the ins and outs could balance out.

[cbeast]

Every month, your employer transfers Bitcoins into a time-locked address that can't be transferred out before you reach retirement age.  You have the key to the address.  You can verify the transfer on the blockchain.

Intriguing, but probably won't fly.
All Bitcoin-Hype aside, for easiness' sake, let's assume we're doing this with our own, special coin, let's call it RetirementCoin(RC).

In the beginning, people will need a lot of RC to pay into the pension fund. RC is new, its price is low, i.e., for a given amount of e.g. US Dollars, you'll have to buy a lot of RC and lock them in your address. Exchange rate of RC will go "to the moon"™, leading to lower amounts of RC required to put into your retirement address.

The years go by.

Finally, when pay-outs start, huge amounts of RC from the first pay-ins will pour into the market, pushing the exchange rate down.
Your second pay-out will be substantially less RC at a substantially lower exchange rate. You'll be practically broke once you retire.

Your entire premise of using a RC is flawed by the same hype as Bitcoin.

[lucasjkr]

Are there such things as time locked transactions with a single key?  Do they send the transaction with a date in the future? What happens if you lose the key the coins are destined for before you reach retirement age?

[countryfree]

Every month, your employer transfers Bitcoins into a time-locked address that can't be transferred out before you reach retirement age.  You have the key to the address.  You can verify the transfer on the blockchain.

No middle-men.  No funny business.  No brokers with pyramid/eyeball shaped logos.  No "oops we went bankrupt and lost your retirement."  No bail-ins.  No raising the age of retirement.

Just Bitcoin.

Who keeps the key to this address? How can you be sure you'll get the money when scheduled? How can you be sure this is a good and safe investment? If BTC's price falls down, your pension will be peanuts, and that doesn't sound good. Anyhow, this isn't better in any way than classic retirement funds.

[jbrnt]

Are there such things as time locked transactions with a single key?  Do they send the transaction with a date in the future? What happens if you lose the key the coins are destined for before you reach retirement age?

I have heard that one can make a transaction which will not confirm before a predetermined block. I am not sure about the details, but the coins will be in limbo for the time being, receiving address will be able to spend it when it gets 1 confirmation in the predetermined future. 

[practicaldreamer]

Your entire premise of using a RC is flawed by the same hype as Bitcoin.

Agreed.

How about a bitcoin pension fund where the btc is invested in something productive ? And the pensioner thereby reaps the dividends of that productive activity ?
 
A Self Invested Personal Pension (SIPP) where bitcoin is deposited, rather than GBP.

Rather than, lets put it all into BTC/to the moon etc

[lucasjkr]

Are there such things as time locked transactions with a single key?  Do they send the transaction with a date in the future? What happens if you lose the key the coins are destined for before you reach retirement age?

I have heard that one can make a transaction which will not confirm before a predetermined block. I am not sure about the details, but the coins will be in limbo for the time being, receiving address will be able to spend it when it gets 1 confirmation in the predetermined future. 

So, in essence, one would be hoping that the wouldn't lose their private key in 30 or 40 years? That's beside the speculation as to whether or not bitcoin itself will still be around in the future? I know we all want it to be, but storing huge sums with no way to yank it out if something negative occurs, neither of those seem like especially wise decisions...

[cutesakura]

very nice if bitcoin can be used as a fund after we retire from work, which is expected bitcoin exchange rates on the future will increase and can be used up to the day our parents, hopefully the price will be more stable bitcoin exchange ... 

[jinxx]

I was actually thinking about this too.

Until i wanted a amazon gift card and fell upon gyft.. fml lol.

[nextblast]

I am considering similar plan... Set up college fund for my child with BTC. Hope btc to da moon and it works!

[scarsbergholden]

Every month, your employer transfers Bitcoins into a time-locked address that can't be transferred out before you reach retirement age.  You have the key to the address.  You can verify the transfer on the blockchain.

There are many reasons why someone would be able to withdraw money from their retirement accounts as it stands now. Age is only one reason why people can withdraw.

Another issue is that there is no guarantee that bitcoin will still be around by the time a person is ready to retire. I agree that bitcoin is very attractive today, however this may change in the next 40 years when many people who are early in their careers (and just starting to save for retirement) will be ready to retire

[Mccoy818]

My advice: Do not depend on it. Specially for the older people, don't invest your retirement on btc.

[ScryptAsic]

Are there such things as time locked transactions with a single key?  Do they send the transaction with a date in the future? What happens if you lose the key the coins are destined for before you reach retirement age?

I have heard that one can make a transaction which will not confirm before a predetermined block. I am not sure about the details, but the coins will be in limbo for the time being, receiving address will be able to spend it when it gets 1 confirmation in the predetermined future. 

So, in essence, one would be hoping that the wouldn't lose their private key in 30 or 40 years? That's beside the speculation as to whether or not bitcoin itself will still be around in the future? I know we all want it to be, but storing huge sums with no way to yank it out if something negative occurs, neither of those seem like especially wise decisions...

In theory you can take certain precautions to prevent the loss of your private keys, for example a multisig address that can be signed by multiple brain wallets, I think it would be unlikely that brain wallet farmers would be checking these kinds of brain wallets, and you could keep your keys in your head.

I do agree with the issue of not knowing if bitcoin will still be around by the time someone retires. One feature of most/all retirement accounts is the fact that you have the option to sell an investment, but keep the proceeds in your retirement account if you think it is no longer appropriate to hold such an investment

[Sunderland]

hmm nice idea , i will do that soon.
spare some income every month to bitcoin and keep that for couple years.
maybe it will worth alot in the future , or that will great legacy to my sons 
but that can happen if bitcoin still worth in the future.

[cbeast]

Putting 1% of your retirement contributions in Bitcoins wouldn't be a bad idea.

[pattu1]

Putting 1% of your retirement contributions in Bitcoins wouldn't be a bad idea.

People are already thinking on these lines.
http://www.thinkadvisor.com/2014/10/30/bitcoin-in-your-401k?