1 00:00:00,000 --> 00:00:02,340 INTRO: Hi, I'm Ed Slott and I'm Jeff Levine. 2 00:00:02,460 --> 00:00:06,090 And we're two guys who just love to talk about retirement and taxes. 3 00:00:06,120 --> 00:00:10,050 Look, our mission is simple to educate you the saver so that you can make 4 00:00:10,050 --> 00:00:14,160 better decisions because better decisions on the whole lead to better outcomes. 5 00:00:14,190 --> 00:00:15,780 And here's how we're going to do that. 6 00:00:15,840 --> 00:00:20,610 Each week, jeff and I will debate the pros and the cons of a particular retirement 7 00:00:20,610 --> 00:00:25,890 strategy or topic with the goal of helping you keep more of your hard earned money. 8 00:00:26,040 --> 00:00:29,680 Yeah, but we won't know which side of the debate we're taking until we flip a. 9 00:00:30,180 --> 00:00:33,270 Winner of the coin flip gets to pick which side of the debate they want to 10 00:00:33,270 --> 00:00:37,950 argue, and both of us will have to argue in favor of our respective positions, 11 00:00:38,190 --> 00:00:40,500 whether we agree with them or not. 12 00:00:40,500 --> 00:00:43,770 At the end of each debate, there's going to be one clear winner. 13 00:00:43,980 --> 00:00:47,640 You a more informed saver who can hopefully apply the merits of 14 00:00:47,640 --> 00:00:50,790 each side of the debate to your own personal situation, to decide 15 00:00:50,790 --> 00:00:52,740 what's best for you and your family. 16 00:00:52,800 --> 00:00:53,700 So here we go. 17 00:00:53,700 --> 00:00:55,860 Welcome to the great retirement debate. 18 00:01:02,099 --> 00:01:05,640 Jeff Levine: Hello everyone and welcome back to the great retirement debate. 19 00:01:05,640 --> 00:01:06,660 I'm Jeff Levine. 20 00:01:06,660 --> 00:01:10,860 And with me today as always is Ed Slott, Ed, good afternoon, what's going on? 21 00:01:11,100 --> 00:01:12,420 Ed Slott: Well, great to be back with you. 22 00:01:12,420 --> 00:01:14,250 We've got a great topic today. 23 00:01:14,250 --> 00:01:16,020 One that everybody's talking about. 24 00:01:16,020 --> 00:01:18,149 So tell us, Jeff, what are we talking about today? 25 00:01:18,149 --> 00:01:19,170 What are we debating? 26 00:01:19,440 --> 00:01:21,660 Jeff Levine: What if, what if I say, I don't know, you've already set this up 27 00:01:21,660 --> 00:01:24,600 to be such a, a hyped, uh, a hype topic. 28 00:01:25,140 --> 00:01:25,470 Ed Slott: Yeah. 29 00:01:25,470 --> 00:01:25,740 Yeah. 30 00:01:25,740 --> 00:01:27,119 It is a hype topic, man. 31 00:01:27,780 --> 00:01:30,270 It is the epitome of a hype topic. 32 00:01:30,330 --> 00:01:32,220 Jeff Levine: Are, are you, are you getting where we're going yet? 33 00:01:32,220 --> 00:01:32,669 Folks? 34 00:01:32,669 --> 00:01:34,979 Are you, are you seeing what's coming? 35 00:01:35,280 --> 00:01:37,919 What, what could we possibly be talking about today? 36 00:01:37,925 --> 00:01:40,440 That just is all over everywhere. 37 00:01:41,100 --> 00:01:44,865 and it won't let up, that's right, we're talking about 38 00:01:45,165 --> 00:01:47,055 crypto in retirement accounts. 39 00:01:47,055 --> 00:01:52,365 Ed, should you own cryptocurrency in a retirement account? 40 00:01:52,365 --> 00:01:53,295 That's our topic for today. 41 00:01:53,295 --> 00:01:54,105 You wanna flip the coin? 42 00:01:54,345 --> 00:01:54,735 Ed Slott: All right. 43 00:01:54,740 --> 00:01:57,345 And remember it, whatever it comes out. 44 00:01:57,345 --> 00:01:59,415 Oh, you have to pick, uh, heads or tails. 45 00:01:59,475 --> 00:02:01,365 Jeff Levine: I will, uh, I'm gonna take tails. 46 00:02:01,755 --> 00:02:03,675 Ed Slott: I'm gonna actually flip a real coin. 47 00:02:03,675 --> 00:02:06,795 Now, if you've seen other episodes, Jeff has an automatic program, 48 00:02:06,795 --> 00:02:08,294 so he always wins or whatever. 49 00:02:08,625 --> 00:02:11,025 Uh, this is an actual flip came out. 50 00:02:11,355 --> 00:02:16,035 Oh, in case you didn't hear there it is came out tails. 51 00:02:17,055 --> 00:02:17,535 Jeff Levine: Tails. 52 00:02:17,540 --> 00:02:18,315 So I get to pick. 53 00:02:18,345 --> 00:02:20,894 All right, I'm gonna, I'm gonna do you a favor, Ed. 54 00:02:21,270 --> 00:02:21,810 Ed Slott: Oh, good. 55 00:02:22,020 --> 00:02:24,160 Jeff Levine: I'm going to take the side of pro. 56 00:02:25,030 --> 00:02:25,980 Ed Slott: Pro crypto. 57 00:02:26,070 --> 00:02:27,120 Ooh, that's bold. 58 00:02:27,330 --> 00:02:27,840 That's it? 59 00:02:28,380 --> 00:02:29,930 Jeff Levine: Hey, you only live once, Ed. 60 00:02:30,240 --> 00:02:30,390 YOLO! 61 00:02:31,170 --> 00:02:32,040 Ed Slott: Yeah, right. 62 00:02:32,045 --> 00:02:34,770 Jeff Levine: That's that's gonna be the theme for today's episode for me. 63 00:02:34,775 --> 00:02:35,910 You only live once. 64 00:02:35,910 --> 00:02:36,780 Just let's do it. 65 00:02:37,590 --> 00:02:38,040 Ed Slott: All right. 66 00:02:38,040 --> 00:02:41,570 Well, this, this works out because if you've been noticing on our great 67 00:02:41,570 --> 00:02:45,290 retirement debate, there's also a great generational divide here. 68 00:02:45,790 --> 00:02:47,280 Jeff Levine: Yes, you are old and I'm not. 69 00:02:47,440 --> 00:02:47,790 Ed Slott: Right. 70 00:02:47,790 --> 00:02:48,060 Right. 71 00:02:48,365 --> 00:02:52,505 So if anybody should be pro crypto, it should be the young guy, cuz he's got more 72 00:02:52,505 --> 00:02:54,935 time to recover when he gets wiped out. 73 00:02:55,640 --> 00:02:59,195 uh, you know, this is why I don't like crypto a couple of 74 00:02:59,195 --> 00:03:00,695 reasons in retirement accounts. 75 00:03:00,695 --> 00:03:05,225 I don't understand it enough to explain it to somebody as an advisor, 76 00:03:05,435 --> 00:03:09,065 if I can't explain how it works and yes, I've read all the articles 77 00:03:09,065 --> 00:03:13,940 on blockchain and this and that and how, uh, safe it is or unsafe. 78 00:03:13,940 --> 00:03:18,530 Although I just did see an article where a guy died with 250 million in crypto 79 00:03:18,740 --> 00:03:20,360 and he took the password with him. 80 00:03:20,360 --> 00:03:22,100 Nobody ever got that money. 81 00:03:22,100 --> 00:03:23,660 I don't know if you saw that piece Jeff. 82 00:03:23,660 --> 00:03:24,530 A few months ago. 83 00:03:24,560 --> 00:03:28,670 Jeff Levine: Yeah and there there's another one I saw years ago where, uh, 84 00:03:28,700 --> 00:03:33,860 some, some guy put his like whole bunch of early crypto in a, in a cold storage, 85 00:03:33,860 --> 00:03:40,420 which is effectively a, uh, an offline storage for your, your digital currency. 86 00:03:40,990 --> 00:03:44,500 And, uh, he has three guesses or itself destructs, and he's 87 00:03:44,500 --> 00:03:46,300 been wrong on two already. 88 00:03:46,420 --> 00:03:46,990 Ed Slott: Oh gosh. 89 00:03:46,990 --> 00:03:49,240 Jeff Levine: I mean it's millions and millions and millions of 90 00:03:49,240 --> 00:03:51,640 dollars and he couldn't bring himself to guess the third one 91 00:03:52,090 --> 00:03:56,530 Ed Slott: That said should, you know, uh, for people approaching retirement 92 00:03:56,530 --> 00:04:01,924 or already there, I say it's, it's a, it's a no brainer to stay away from it. 93 00:04:01,924 --> 00:04:06,725 Yeah there may be upside, but there's also downside too. 94 00:04:07,024 --> 00:04:11,614 And as you get older, you don't have the time to recover from your losses. 95 00:04:11,614 --> 00:04:16,099 Look at the people in 2008 and nine that were say in their seventies or eighties, 96 00:04:16,099 --> 00:04:18,079 they did not have the years to recover. 97 00:04:18,079 --> 00:04:21,860 Yes, the market went up, but at least that's a market, a market we know 98 00:04:21,860 --> 00:04:25,969 eventually goes up, nobody knows what's going to happen with this crypto. 99 00:04:25,969 --> 00:04:27,349 It's great for younger people. 100 00:04:27,349 --> 00:04:31,580 Maybe it's great for a couple of reasons when they lose their money, at least they 101 00:04:31,580 --> 00:04:37,505 got that lesson early on, and maybe that will help them for years later to not to 102 00:04:37,505 --> 00:04:42,245 be so aggressive or, uh, be more careful with their money, but they also have 103 00:04:42,250 --> 00:04:45,335 the advantage of having time to recover. 104 00:04:45,575 --> 00:04:45,905 Oh. 105 00:04:45,965 --> 00:04:48,515 And they also have parents that can bail them out. 106 00:04:48,520 --> 00:04:50,795 Most people don't have that advantage. 107 00:04:51,605 --> 00:04:55,265 So I, I'm not a big fan unless I could really understand it. 108 00:04:55,265 --> 00:04:58,205 I guess maybe people might say Ed, you just don't understand 109 00:04:58,205 --> 00:04:59,825 the blockchain and this and that. 110 00:05:00,155 --> 00:05:05,760 And maybe that's why, uh, you are so anti-crypto in a retirement account. 111 00:05:05,760 --> 00:05:09,180 To me, a retirement account means security you're depending 112 00:05:09,180 --> 00:05:11,219 on this money for retirement. 113 00:05:11,550 --> 00:05:16,050 So, uh, I would say no on that and of the regulators are with me. 114 00:05:16,050 --> 00:05:19,380 They're all worried about it, but, uh, let's hear what you have to 115 00:05:19,380 --> 00:05:21,060 say, Jeff, for the youngsters here. 116 00:05:21,390 --> 00:05:25,090 Jeff Levine: Well, for anybody, I would say if you're thinking about owning 117 00:05:25,090 --> 00:05:28,300 it, right and this is one of those things where, you know, maybe it's not 118 00:05:28,300 --> 00:05:31,270 so much of a merit of the investments. 119 00:05:31,510 --> 00:05:32,680 It's a matter of, 120 00:05:32,710 --> 00:05:34,090 Ed Slott: Yeah let me stop you there. 121 00:05:34,190 --> 00:05:36,240 Is, is it, would you call it an investment? 122 00:05:37,170 --> 00:05:39,210 Jeff Levine: Yeah, it's a, it's a speculative investment. 123 00:05:39,210 --> 00:05:40,770 Ed Slott: Oh, that tells me all I need to know. 124 00:05:40,830 --> 00:05:41,340 Yeah. 125 00:05:42,660 --> 00:05:44,070 Jeff Levine: Well, it's it's listen. 126 00:05:44,070 --> 00:05:47,190 Anything can be an investment if you think it's gonna go up in money, but, 127 00:05:47,730 --> 00:05:49,590 or up in value over time, I should say. 128 00:05:49,800 --> 00:05:51,900 Uh, do I think it's going to work out great. 129 00:05:51,900 --> 00:05:52,230 I don't know. 130 00:05:52,230 --> 00:05:53,820 I have my look personally, 131 00:05:53,825 --> 00:05:56,670 Ed Slott: you have a tough argument, so I'm gonna just let you talk. 132 00:05:56,730 --> 00:05:56,970 Jeff Levine: All right. 133 00:05:56,970 --> 00:05:58,350 Well, I, I own some. 134 00:05:58,530 --> 00:05:59,969 I own some cryptocurrency. 135 00:05:59,969 --> 00:06:03,929 I actually don't own it in a retirement account, uh, simply because there's not 136 00:06:03,929 --> 00:06:07,859 a ton of, uh, custodians out there, at least at the time that I was buying them 137 00:06:07,859 --> 00:06:11,250 that, uh, that would make it easy, but they're starting to come online more. 138 00:06:11,255 --> 00:06:15,000 And if you can own crypto in a retirement account, especially a Roth 139 00:06:15,005 --> 00:06:19,530 IRA, that would seem to make, uh, a lot of sense to me because if there's 140 00:06:19,530 --> 00:06:23,609 one thing we've seen it, it, you know, you've heard Elon talk, right. 141 00:06:23,640 --> 00:06:24,630 He's to the moon. 142 00:06:24,695 --> 00:06:25,505 To the moon. 143 00:06:25,745 --> 00:06:30,005 Uh, and this is one of those investments that has that potential. 144 00:06:30,010 --> 00:06:31,025 I'm not predicting. 145 00:06:31,025 --> 00:06:31,985 It will go there. 146 00:06:31,985 --> 00:06:35,135 Like to be clear, I'm not saying it will go to the moon. 147 00:06:35,495 --> 00:06:39,875 I'm just saying there are certain things like if you buy a us treasury bill, you 148 00:06:39,880 --> 00:06:43,355 are just not going to make 600% in a year. 149 00:06:43,615 --> 00:06:47,710 You have the possibility with cryptocurrency again, 150 00:06:47,710 --> 00:06:48,700 I'm not predicting it. 151 00:06:48,700 --> 00:06:52,480 I wouldn't suggest that that's likely I don't, I, I personally 152 00:06:52,480 --> 00:06:57,310 don't think that's going to happen, but we've seen dramatic rises in, in 153 00:06:57,315 --> 00:06:59,680 cryptocurrency prices over the years. 154 00:06:59,920 --> 00:07:04,380 I mean, the, the first usage of Bitcoin as kind of the, the, the, the, 155 00:07:04,410 --> 00:07:08,785 the first cryptocurrency the first E currency, somebody bought, you know, 156 00:07:08,815 --> 00:07:12,625 pizzas for thousands of Bitcoin. 157 00:07:12,625 --> 00:07:14,905 What would, what would be worth, you know, millions and millions 158 00:07:14,910 --> 00:07:16,165 and millions of dollars today. 159 00:07:16,435 --> 00:07:20,395 So we've seen the, uh, the price of these cryptocurrencies. 160 00:07:20,395 --> 00:07:24,145 So not just Bitcoin others as well, like Ethereum and, uh, 161 00:07:24,145 --> 00:07:26,110 you know, the, the others. 162 00:07:26,160 --> 00:07:27,090 I'm just gonna say others. 163 00:07:27,090 --> 00:07:28,090 Ed Slott: Doge coin, is that one? 164 00:07:28,730 --> 00:07:29,280 Jeff Levine: Doge coin. 165 00:07:29,280 --> 00:07:29,760 Yeah. 166 00:07:29,790 --> 00:07:30,720 Yeah, yeah. 167 00:07:30,780 --> 00:07:31,170 That's good. 168 00:07:31,170 --> 00:07:31,830 You didn't pronounce it. 169 00:07:31,830 --> 00:07:32,510 Doggy coin, Ed. 170 00:07:32,510 --> 00:07:32,920 It that's. 171 00:07:32,940 --> 00:07:35,760 That's the, okay, so you're not, you're not as, maybe you're not 172 00:07:35,760 --> 00:07:36,840 as out of touch as you think. 173 00:07:36,840 --> 00:07:39,630 You know, when some, some people see it and they call it doggy coin. 174 00:07:39,750 --> 00:07:41,670 That's that's when you know, you're talking to someone 175 00:07:41,670 --> 00:07:43,860 who, uh, , who maybe is bit 176 00:07:43,950 --> 00:07:47,310 Ed Slott: I'm old and I'm more conservative as I get on in years, 177 00:07:47,310 --> 00:07:49,230 but this is to benefit anybody. 178 00:07:49,530 --> 00:07:53,989 And I will take your point, uh, if you're going to do it, I would do it 179 00:07:53,989 --> 00:07:58,010 probably in a Roth IRA, which has the greatest upside, because let's say it 180 00:07:58,010 --> 00:08:01,700 does go through the roof and you make all this money, then it's all tax free. 181 00:08:01,940 --> 00:08:06,590 But the downside to that article, if you lose a fortune, uh, the IRS doesn't 182 00:08:06,590 --> 00:08:10,460 share your pain, you won't get any deduction as opposed to if you lost it 183 00:08:10,460 --> 00:08:17,240 in a 401k or a tax, a tax deferred IRA, uh, you'll have less money and less tax. 184 00:08:17,240 --> 00:08:20,140 So the, the government does share your pain on the down side. 185 00:08:21,340 --> 00:08:22,590 Jeff Levine: Yeah, and that they do. 186 00:08:22,590 --> 00:08:26,160 And, and to that point, the other thing is, you know, one of the, a 187 00:08:26,160 --> 00:08:30,120 lot of, a lot of younger people, especially they will, uh, trade 188 00:08:30,150 --> 00:08:32,730 cryptocurrency rather vociferously. 189 00:08:32,820 --> 00:08:38,730 And the reporting on, uh, cryptocurrency transactions is not nearly as strong as it 190 00:08:38,730 --> 00:08:41,310 is with some other sorts of investments. 191 00:08:41,310 --> 00:08:43,550 Things like stocks, bonds, mutual funds, etc. 192 00:08:43,890 --> 00:08:48,305 And that can create an absolute tax nightmare for folks, right? 193 00:08:48,305 --> 00:08:49,505 An absolute tax 194 00:08:49,505 --> 00:08:51,095 Ed Slott: Talking about the stocks? 195 00:08:51,755 --> 00:08:54,545 Jeff Levine: Well, no, no more so in the sense that like, if you're gonna 196 00:08:54,545 --> 00:08:57,814 trade cryptocurrency, why not do it into retirement account where you don't have 197 00:08:57,814 --> 00:08:59,735 to keep trackable your buys and losses? 198 00:09:00,095 --> 00:09:00,365 Yeah. 199 00:09:00,370 --> 00:09:00,755 Yeah. 200 00:09:01,235 --> 00:09:02,345 So, so to me.. 201 00:09:02,750 --> 00:09:04,130 Ed Slott: That's the same for stocks. 202 00:09:04,130 --> 00:09:06,830 I always tell people if they're big players and they're going in and out 203 00:09:06,830 --> 00:09:10,970 all the time, do it an IRA or Roth IRA where the transactions don't 204 00:09:10,975 --> 00:09:12,940 have to be reported any anywhere. 205 00:09:13,070 --> 00:09:13,400 Jeff Levine: You're right. 206 00:09:13,400 --> 00:09:16,820 Don't bother your CPA with 75 pages of, of buys and sells. 207 00:09:17,060 --> 00:09:20,810 That's gonna cost you $400 to, you know, an additional $400 to add to 208 00:09:20,815 --> 00:09:26,600 your tax return to report the net $13 you made on your 795 transactions. 209 00:09:26,645 --> 00:09:27,605 Ed Slott: A little off topic. 210 00:09:27,605 --> 00:09:31,085 I had a client like this many years ago, a big trader. 211 00:09:31,385 --> 00:09:34,954 And, uh, this was in the .com era when that started. 212 00:09:35,314 --> 00:09:40,145 Uh, and he was a big trader and he had, I, I don't know how many pages anyway, 213 00:09:40,324 --> 00:09:46,175 he came up with a, over a billion in gains, but over a billion in losses too. 214 00:09:46,625 --> 00:09:51,095 And at that point, the tax program didn't have the billion dollar digit. 215 00:09:51,095 --> 00:09:52,564 It didn't have room for it. 216 00:09:52,564 --> 00:09:54,685 I had to do like 900,000 and. 217 00:09:55,215 --> 00:10:00,915 Uh, they, he came in with a box, uh, an actual carton of the, of all the trades. 218 00:10:01,635 --> 00:10:02,685 Jeff Levine: Was he a client again? 219 00:10:02,685 --> 00:10:03,604 The next year, Ed? 220 00:10:03,984 --> 00:10:06,780 Ed Slott: I think he was. 221 00:10:06,780 --> 00:10:08,640 Jeff Levine: Did you send him on his way politely? 222 00:10:09,240 --> 00:10:10,230 Ed Slott: No, no, no. 223 00:10:10,230 --> 00:10:14,040 It, it wasn't, you know, he had all the, uh, all the totals. 224 00:10:14,040 --> 00:10:18,959 I only had to use the totals, but he had literally a box of back then 225 00:10:18,964 --> 00:10:20,850 the, the worksheets were attached. 226 00:10:21,060 --> 00:10:21,689 You know what I mean? 227 00:10:21,694 --> 00:10:22,140 The, uh, 228 00:10:22,230 --> 00:10:22,319 Jeff Levine: yes 229 00:10:23,010 --> 00:10:25,980 Ed Slott: like they still use at the airports when they, when you get on 230 00:10:25,980 --> 00:10:29,339 the flight, you ever notice that they still use, what, what is that printer 231 00:10:29,339 --> 00:10:31,620 where prints the continuous role? 232 00:10:31,650 --> 00:10:31,860 Jeff Levine: Yeah. 233 00:10:31,860 --> 00:10:33,030 Dot matrix printer. 234 00:10:33,205 --> 00:10:33,415 Yeah. 235 00:10:33,415 --> 00:10:33,655 Yeah. 236 00:10:33,685 --> 00:10:34,285 The thing I got 237 00:10:35,515 --> 00:10:35,965 Ed Slott: Yeah yeah. 238 00:10:35,965 --> 00:10:36,805 Still using that. 239 00:10:36,810 --> 00:10:38,695 So that's what he had, but you're right. 240 00:10:38,725 --> 00:10:39,865 A little off topic. 241 00:10:39,895 --> 00:10:43,945 Uh, you could get into a lot of transactions and if you're gonna 242 00:10:43,945 --> 00:10:47,305 do it, that the retirement, uh, plan is a way to do it because they 243 00:10:47,310 --> 00:10:48,775 don't have to be reported there. 244 00:10:49,315 --> 00:10:49,765 Jeff Levine: All right. 245 00:10:49,765 --> 00:10:50,515 So I win. 246 00:10:51,330 --> 00:10:53,130 Ed Slott: Well, I wouldn't, no, I wouldn't go that far. 247 00:10:53,250 --> 00:10:57,150 I said, if you're going to do it, and I would also say, if you're going to do it, 248 00:10:57,150 --> 00:11:00,840 and you would have to agree with this, even the regulators and the custodians 249 00:11:00,840 --> 00:11:05,360 that are even beginning to offer this now, uh, none of them are saying, I, I 250 00:11:05,365 --> 00:11:08,340 think all of them are saying, if you're going to do it, don't go more than 5% or 251 00:11:08,340 --> 00:11:10,560 they won't even let you go more than 5%. 252 00:11:11,100 --> 00:11:12,540 Jeff Levine: Well, I think it's important to. 253 00:11:13,270 --> 00:11:17,920 To distinguish here, let's say between plans and IRAs and, 254 00:11:17,920 --> 00:11:19,060 and other types of assets. 255 00:11:19,060 --> 00:11:24,760 If, if you are a plan fiduciary, and I've said this before, I would not 256 00:11:24,760 --> 00:11:29,320 include cryptocurrency in my plan lineup that is asking for trouble. 257 00:11:29,590 --> 00:11:34,330 And, and not because you're saying crypto is, is no good or not, because 258 00:11:34,330 --> 00:11:37,210 you're saying you don't believe in it or you do it doesn't matter 259 00:11:37,210 --> 00:11:41,770 what you think the regulators, as you have just said are, uh, are. 260 00:11:42,444 --> 00:11:46,015 Have have voiced concern to put it mildly. 261 00:11:46,405 --> 00:11:47,454 And as a plan, 262 00:11:47,454 --> 00:11:49,105 Ed Slott: I wouldn't even put it mildly. 263 00:11:49,165 --> 00:11:52,795 Uh, one, I think it was the department of labor that actually called crypto 264 00:11:52,795 --> 00:11:54,574 in a retirement plan kryptonite. 265 00:11:56,064 --> 00:11:56,845 Jeff Levine: That's that's good. 266 00:11:56,845 --> 00:11:57,775 I may have to steal that ed. 267 00:11:58,045 --> 00:12:04,555 Uh, the, um, the, the issue that concerns me there is the fiduciary liability and 268 00:12:04,555 --> 00:12:08,490 what a lot of plan fiduciaries don't realize is not only are, is the, is the 269 00:12:08,490 --> 00:12:10,860 plan and the company kind of responsible. 270 00:12:11,069 --> 00:12:14,250 But so too is the plan fiduciary like the HR representative. 271 00:12:14,250 --> 00:12:18,300 They are personally liable for the investment lineup and the decisions 272 00:12:18,300 --> 00:12:20,160 that they make within the plan. 273 00:12:20,520 --> 00:12:28,600 And so I wi with regulators being that vociferous about their dislike 274 00:12:28,939 --> 00:12:31,050 of the, of, of crypto being in a plan. 275 00:12:31,980 --> 00:12:35,725 Even if I thought it was a great idea, personally, I couldn't I couldn't 276 00:12:35,745 --> 00:12:40,215 possibly get there as a plan fiduciary, but if this was my own account and I was 277 00:12:40,215 --> 00:12:45,285 looking at my, again, an IRA as a, as an example here, or if I was a self-employed 278 00:12:45,290 --> 00:12:49,545 individual and didn't have other people in the plan to concern myself with, then 279 00:12:49,550 --> 00:12:52,875 I'm not as concerned about the fiduciary liability, cause it's literally just me 280 00:12:52,875 --> 00:12:57,645 or if it's an IRA there isn't the same sort of fiduciary plan liability there. 281 00:12:57,855 --> 00:13:02,564 And so that again would, would seem to me a, a good place to hold those 282 00:13:02,564 --> 00:13:05,895 assets because I don't have to worry about the regulator's issue. 283 00:13:05,895 --> 00:13:09,375 No regulator is suing me for owning whatever I want in my IRA. 284 00:13:09,405 --> 00:13:09,885 It's mine. 285 00:13:10,665 --> 00:13:13,065 Ed Slott: I'll give you another argument for your side. 286 00:13:13,455 --> 00:13:16,965 Again, dealing with clients for many years, every now and then 287 00:13:16,965 --> 00:13:18,105 you probably have the same thing. 288 00:13:18,105 --> 00:13:21,675 You had a client that liked to have play money in the market. 289 00:13:22,035 --> 00:13:22,335 Jeff Levine: That's it! 290 00:13:22,935 --> 00:13:23,385 Ed Slott: Right. 291 00:13:23,685 --> 00:13:27,105 Maybe, you know, in a retirement account, maybe even better in a Roth. 292 00:13:27,105 --> 00:13:30,135 If the client, you know, is just itchy or if you're watching this 293 00:13:30,135 --> 00:13:32,835 and you are, you are the person you say, but I'd like to try. 294 00:13:33,255 --> 00:13:33,645 Alright. 295 00:13:33,735 --> 00:13:37,245 Put that aside in a, probably in a self-directed IRA, 296 00:13:37,245 --> 00:13:38,385 you'll probably need that. 297 00:13:38,385 --> 00:13:41,805 Most of the regular custodians, I don't think are allowing it yet, but 298 00:13:42,075 --> 00:13:46,935 you, you have a, a separate play money account for maybe 5% or whatever it is. 299 00:13:47,295 --> 00:13:51,765 And you know, I'm okay if I lose that money, but I'm gonna have fun with it. 300 00:13:51,825 --> 00:13:55,635 That's okay too, then I'm okay with, uh, so that's an 301 00:13:55,635 --> 00:13:57,045 argument for your side, right? 302 00:13:57,045 --> 00:13:57,885 Jeffrey, you agree with. 303 00:13:58,545 --> 00:13:58,905 Jeff Levine: Yeah. 304 00:13:58,905 --> 00:14:02,114 And I think that's today, that's the only prudent way to look at 305 00:14:02,145 --> 00:14:05,114 cryptocurrency is as play money. 306 00:14:05,114 --> 00:14:07,785 And when we say play, you know, we don't mean that you don't care about it. 307 00:14:07,790 --> 00:14:11,444 It's just that it's not gonna change your life if you lose it. 308 00:14:11,744 --> 00:14:12,045 Right. 309 00:14:12,045 --> 00:14:13,574 I mean, it, it really it's. 310 00:14:14,005 --> 00:14:16,364 Cryptocurrency is an incredibly. 311 00:14:17,165 --> 00:14:18,574 Speculative asset. 312 00:14:18,964 --> 00:14:24,574 Uh, it is highly volatile and there's also, you know, threats related to the 313 00:14:24,574 --> 00:14:28,775 cryptocurrency that don't exist with other sorts of investments, even things like 314 00:14:29,135 --> 00:14:31,895 will the cryptocurrency be stolen, right? 315 00:14:31,895 --> 00:14:36,790 We've seen, uh, We've seen breaches of exchanges where millions and millions 316 00:14:36,790 --> 00:14:40,930 of dollars, billions, in some cases of dollars of cryptocurrency has been stolen. 317 00:14:40,930 --> 00:14:45,760 And one of the challenges with cryptocurrency is while it is all 318 00:14:45,760 --> 00:14:50,560 let's say recorded on the blockchain, you don't necessarily know where. 319 00:14:51,155 --> 00:14:52,354 Those dollars are going. 320 00:14:52,354 --> 00:14:56,704 There's an ability to take dollars offline, effectively in cold storage. 321 00:14:56,974 --> 00:15:00,905 Uh, you can run, there's no person necessarily attached to it. 322 00:15:00,905 --> 00:15:03,334 Well, there's always a person, but you don't necessarily know who 323 00:15:03,334 --> 00:15:06,785 that person is that's attached to that account at the end of the day. 324 00:15:07,025 --> 00:15:11,854 And so it can make tracking down stolen cryptocurrency much more difficult 325 00:15:11,885 --> 00:15:14,795 than say, um, traditional dollars. 326 00:15:15,360 --> 00:15:16,319 Ed Slott: It can be hacked. 327 00:15:16,319 --> 00:15:20,130 And we, we were just at a conference you and I, where we, I don't know 328 00:15:20,130 --> 00:15:23,910 if this happened, but one of the speakers mentioned, uh, first of 329 00:15:23,910 --> 00:15:25,770 all, leaving it to family members. 330 00:15:25,800 --> 00:15:29,250 You don't know the password it's gone, but he was even talking. 331 00:15:29,255 --> 00:15:30,870 I don't know if you were in that session where. 332 00:15:31,095 --> 00:15:33,915 He said, you know, it used to be the estate executor, which 333 00:15:33,915 --> 00:15:35,565 is a very trusted position. 334 00:15:35,565 --> 00:15:38,265 Another position of fiduciary handling your estate, which 335 00:15:38,265 --> 00:15:39,585 could be a family member. 336 00:15:39,885 --> 00:15:44,025 In the past, if the executor say stole money from the estate, 337 00:15:44,030 --> 00:15:45,495 there would be a paper trail. 338 00:15:45,825 --> 00:15:49,965 And this particular speaker, if you recall, Jeff said, if the estate 339 00:15:49,995 --> 00:15:55,365 executor, uh, runs off with the Bitcoin or the crypto, nobody will ever know 340 00:15:56,085 --> 00:15:56,805 Jeff Levine: That's true. 341 00:15:57,075 --> 00:15:57,405 That's true. 342 00:15:57,410 --> 00:16:00,735 Especially the person who's dead. 343 00:16:01,065 --> 00:16:01,765 Never know. 344 00:16:02,305 --> 00:16:06,595 Uh, well, you know, ed, this is one of those areas where I think we both 345 00:16:06,595 --> 00:16:11,395 agree on the fact that cryptocurrency is, is speculative in nature. 346 00:16:11,755 --> 00:16:15,085 And if you're thinking about doing it, one of the reasons you may wanna do 347 00:16:15,085 --> 00:16:20,970 it in a retirement account is simply that it, uh, a, if you do it in a Roth, 348 00:16:21,250 --> 00:16:24,915 all that future appreciation is going to be tax and penalty free provided 349 00:16:24,915 --> 00:16:27,285 you hold onto it until retirement account and meet certain rules, of 350 00:16:27,285 --> 00:16:28,905 course, but you have the potential. 351 00:16:28,905 --> 00:16:32,415 If, if you're gonna hit a grand slam, you might as well hit the grand slam tax free. 352 00:16:32,865 --> 00:16:37,515 And also if we look at the reporting that goes along, if you're gonna trade 353 00:16:37,545 --> 00:16:42,545 cryptocurrency relatively heavily, the current ability to report on those 354 00:16:42,545 --> 00:16:47,615 trades is not nearly as, uh, robust as is the same infrastructure surrounding 355 00:16:47,615 --> 00:16:50,975 traditional investments like stocks, bonds, mutual funds, ETFs it's coming. 356 00:16:50,975 --> 00:16:52,115 There are programs out there. 357 00:16:52,115 --> 00:16:55,175 Ed Slott: Yeah, I was just gonna say, uh, the more that the more money that 358 00:16:55,175 --> 00:16:58,295 builds up in these things and the more horror stories that develop in 359 00:16:58,300 --> 00:17:01,585 the media, the, the tighter of the regulation will be at some point. 360 00:17:01,775 --> 00:17:04,440 Jeff Levine: It's funny, cause just a few years ago, ed, it was all, the 361 00:17:04,440 --> 00:17:05,760 stories weren't horror stories, right? 362 00:17:05,760 --> 00:17:10,770 It was this one was able to, you know, walk away and retire with 700 million 363 00:17:11,280 --> 00:17:15,450 because put in, you know, invested a couple thousand dollars in, in something 364 00:17:15,450 --> 00:17:17,250 and you know, the early two thousands and 365 00:17:17,250 --> 00:17:19,530 Ed Slott: Those are the same stories of that you hear from 366 00:17:19,530 --> 00:17:21,020 people who won the lottery. 367 00:17:21,210 --> 00:17:25,140 You, if you're a guy won a 300 million, that's one out of literally 368 00:17:25,140 --> 00:17:29,430 billions of people who lost money so he could get those billions. 369 00:17:29,580 --> 00:17:30,030 Jeff Levine: That's right. 370 00:17:30,060 --> 00:17:31,200 Well, and ultimately. 371 00:17:32,075 --> 00:17:36,465 Headlines sell right head headlines are what would draw eyeballs would get clicks. 372 00:17:36,465 --> 00:17:41,085 And you don't really hear the story of the, you know, 99.9% of 373 00:17:41,085 --> 00:17:44,715 other people who haven't really done much of anything with it. 374 00:17:44,715 --> 00:17:46,455 So, uh, with any investment for that matter. 375 00:17:46,485 --> 00:17:46,815 So. 376 00:17:47,459 --> 00:17:47,969 That's fair. 377 00:17:48,570 --> 00:17:52,199 Well, ed, we've come to the end of, uh, another one of these debates. 378 00:17:52,199 --> 00:17:57,149 And as we know, there are two sides to every coin, but your life and 379 00:17:57,149 --> 00:18:01,020 your retirement decisions are too important to leave up to that coin flip. 380 00:18:01,620 --> 00:18:07,260 And that's why one thing you and I always agree on is that if you are going to 381 00:18:07,260 --> 00:18:10,229 have a big decision, if you're making a life changing decision or really. 382 00:18:10,865 --> 00:18:12,185 Decision of significance. 383 00:18:12,574 --> 00:18:15,695 It's always best to speak with a knowledgeable financial advisor or 384 00:18:15,695 --> 00:18:19,685 a tax professional so that you can weigh the benefits and drawbacks of 385 00:18:19,685 --> 00:18:23,435 that decision against your specific set of facts and circumstances. 386 00:18:23,885 --> 00:18:26,524 If you'd like to continue to discussion with ed and I we'd love to hear from 387 00:18:26,530 --> 00:18:31,564 you, you can reach out to us on social media, on Twitter @TheSlottReport for Ed. 388 00:18:31,564 --> 00:18:35,955 Again, that's @TheSlottReport with two Ts can reach me @CPAPlanner. 389 00:18:35,975 --> 00:18:37,715 Again, that's @CPAPlanner. 390 00:18:38,014 --> 00:18:42,195 Let us know what we missed, let us know if you think there's a particular aside to 391 00:18:42,195 --> 00:18:44,355 this, uh, debate that you resonate with. 392 00:18:44,565 --> 00:18:47,355 And if you got a suggestion for a future debate, let us know. 393 00:18:47,355 --> 00:18:48,285 We'd love to hear from you. 394 00:18:48,285 --> 00:18:50,695 And until then, ed, it's been fun. 395 00:18:51,365 --> 00:18:54,960 Ed Slott: I think this is a topic we may be revisiting as we learn 396 00:18:54,960 --> 00:18:57,210 more about crypto everywhere. 397 00:18:57,540 --> 00:18:58,560 And it's so critical. 398 00:18:58,560 --> 00:19:02,550 You said it before, but I'll say it again, uh, to run this by an advisor, 399 00:19:02,550 --> 00:19:06,720 just to get the voice of reason here and go through some of the arguments 400 00:19:06,720 --> 00:19:10,590 we made on both sides to see if it's right for you, always, uh, you're going 401 00:19:10,590 --> 00:19:16,320 to need a professional voice of reason here just, uh, to help you avoid maybe 402 00:19:16,320 --> 00:19:18,360 horrible mistakes or where to do it right. 403 00:19:18,360 --> 00:19:22,530 Anyway, we'll see you next time on the great retirement debate! 404 00:19:22,905 --> 00:19:26,145 OUTRO: Jeffrey levine is chief planning officer for Buckingham wealth partners. 405 00:19:26,205 --> 00:19:29,385 This podcast is for informational and educational purposes only, and should 406 00:19:29,385 --> 00:19:32,685 not be construed as specific investment accounting, legal or tax advice. 407 00:19:32,715 --> 00:19:35,625 Certain information mentioned may be based on third party information, 408 00:19:35,625 --> 00:19:38,475 which may become outdated or otherwise superseded without notice. 409 00:19:38,535 --> 00:19:41,745 Third party information is deemed to be reliable, but it's accuracy and 410 00:19:41,745 --> 00:19:43,185 completeness cannot be guaranteed. 411 00:19:43,335 --> 00:19:46,335 The topic discussed in corresponding arguments are those of the speakers 412 00:19:46,515 --> 00:19:49,275 and may not accurately reflect those of Buckingham wealth partners.