A Wiser Retirement®

331. Crypto, Retirement, and Taxes: What’s the Strategy?

• Wiser Wealth Management • Episode 331

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Crypto is becoming a bigger part of retirement conversations, but how does it actually fit into a coordinated tax and estate strategy? In this episode of A Wiser Retirement® Podcast, we break down how to thoughtfully integrate crypto into a diversified retirement plan without derailing your long-term goals.

Related Podcast Episodes: 

Ep 326. Why Crypto Still Confuses Investors

Ep 306. Crypto in Your 401(k)? The Future of Retirement Investing

Ep 286. How can I evaluate crypto as a potential investment?

Other Links:

Teton Crypto Capital

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Framing Crypto Across Life Stages

SPEAKER_03

How does crypto fit into a coordinated retirement tax and estate strategy? Find out more in today's episode.

SPEAKER_01

Welcome to a wiser retirement podcast, where we cut through the noise and bring you real, honest conversations about investing retirement and building lasting wealth. No sales pitches, no gimmicks, just everything your financial advisor won't tell you.

SPEAKER_03

Welcome to Wiser Retirement Podcast. I'm Casey Smith. Today I'm joined by Robert Schwarthout, founder of Teton Crypto Capital. Hey Robert.

SPEAKER_05

How's it going?

SPEAKER_03

Robert is repping his Barrie College pullover today.

SPEAKER_05

Yeah, it's it's you know, the Atlanta folks will understand. It's cold in the mornings right now, and by lunchtime I'll want to be t-shirt. So yeah.

SPEAKER_03

Robert and I are both uh graduates of uh Barrie College. Yep. Rome, Georgia. 24,000 acres, 27,000 acres of land. And about 1,900 students.

SPEAKER_05

Uh 2,300 students. Oh, wow. Is that the largest ever? It is it at the max. Yeah. I think it's like 2,400 with graduate students and um, you know, probably about 10,000 deer. Where are they all living? Uh, you know, um beds on campus is always the challenge.

SPEAKER_03

Yeah, I'm sure. Uh yes, and there are way more deer than um than there are students. Yes. So absolutely. Uh but you have you ever a chance, uh, if you're in Rome, Georgia, go by uh go by the uh campus and get a tour. Tell them you know Robert Schwarthal, they'll let you ride in.

SPEAKER_05

Yeah. Yeah. Um, you know, if you like hiking, there's a uh like miles and miles and miles of trails. Oh, that's yeah, that's people tend to love to do.

SPEAKER_03

So hike uh mountain bike, mountain bike, anything, yeah.

SPEAKER_05

Anything outdoors. Anything outdoors, yeah.

SPEAKER_03

All right. Well, let's get started. Uh today we're gonna focus on um Teton Crypto Capital's uh ideas of uh investing in crypto. Yeah, I feel like I should be asking you the question on this one. Um all right, so let's let's talk. You know, crypto is so new still to so many people. Yes. Um I feel like we should be doing crypto 101 still. Uh I remember when ETFs got launched, and 10 years into it, people were still flooding the ETF 101 class at the conferences, and I was like, what is wrong with you people? That was 10 years ago. Right. But I feel like crypto is going to be the same way. 10 years from now, people are gonna be like, maybe I should be looking into this, and Bitcoin's gonna be at a million, and you know, you'll be like, where were you?

SPEAKER_05

Yeah, yeah. I mean, anything new. I mean, the same thing with the internet, people didn't understand what we would use it for, and now it's everywhere. I it it's just kind of a similar growth trajectory curve.

Asset Class, Sizing, And Volatility

SPEAKER_03

So when you think about crypto in someone's um investing, you think about accumulation phase. So you're building assets. A lot of people that are buying crypto, I would argue, are in their accumulation phase of building wealth. Uh and then you have the distribution phase, which is where you're now living off your portfolio. So you're living off your investments. The retired word. Yep. So crypto still would be a part of that. Yes, it could be. Uh probably the more growth engine, not it doesn't pay dividends, right? So you're not collecting an income from it. And then there's the legacy portion of okay, you pass it to the next generation. So today that's kind of the framework that I want to open this in. Uh, that that we talk about um through retirement and how crypto plays a uh plays a role. So let's when we start with uh like a high net worth retirement portfolio. So a high net worth retirement portfolio, we'll we'll call it a million dollars or more in investable assets, right? Yep. So is crypto an growth asset? Would you call it an alternative asset, or is it a more of a legacy asset? Meaning is it is it something uh maybe a legacy asset could be a home on the lake that's passed from generation to generation, right? Uh an alternative asset is is um uh private equity, uh oil, cows. Yeah, right. Right. Yep. And then a growth is a growth asset would just be, you know, speculative.

SPEAKER_05

Yeah. I mean, certainly growth, you can make it if you squint, you may be able to view it as alternative as well, um, depending on how far down the crypto rabbit hole you get. Yeah. Um, I think you know, if you're just doing Bitcoin and Ethereum, probably just growth, not as much alternative. But there's other cryptos that you know may be more specialized that you may have expertise in that field and they're trying to solve that problem and you feel like you know you you found a gym, yeah. You want to hold on to it. But yeah, certainly not legacy. Um, but yeah, it kind of fits in those other two buckets, depending on how you look at it.

SPEAKER_03

Okay. So you think about um position sizing.

SPEAKER_05

I should ask you this question because you know, for me, you know, I I probably overweighted um on the vast majority of the scale for crypto, right? From a personal holding standpoint. But like, you know, when you mix it into client portfolios these days, what are your like low single-digit percentages?

SPEAKER_03

I I just don't think that I think the people who do it individually with no guidance who get really convicted of something have way too much. Yep. And then the people like myself that think about risk and this could work out to be really big, but I also don't want to lose my firm over it. Sure. Or or the you know, obviously worse is is derailing a client's portfolio. Right. So I think that um something of a professional advice is somewhere in that two to four percent allocation. That makes sense. And and and actually Andrew tells us that too, because when he when he looks at the volatility of almost any crypto. Sure.

SPEAKER_05

Um the whole asset class period. Yeah, the whole asset, right?

SPEAKER_03

Yeah, you look at the volatility, when you get above four percent, it's kind of a law of diminishing returns, right? It just doesn't, it it starts, it adds to the overall rate of return of the portfolio, but it but it's uh in so far in a positive, in a positive manner, right? Uh, but that volatility starts hurting you uh above four percent.

SPEAKER_05

Yeah, you know, and you know, we're in a period of crypto right now that isn't fun to talk about the pricing. Um, you know, yeah. As uh, you know, this last week was what I would consider volatility in crypto. Um, it's all about where your perspective is. Um, you know, I have friends that will text me like, oh, crypto's down today, and it's uh two or three, four or five percent, like whatever. It's just a normal day in crypto. Right. Um but you know, I my spidey senses go off when volatility hits and we see an up or down day more than 10%. Like that's volatility. Yeah. Um and I and I kind of think about it if you compare it to Sometimes in the opposite direction of the market, though. Oh, absolutely.

SPEAKER_03

Wait, the crypto's down 10% per day, but the market was up three. So how is how how is this happening?

SPEAKER_05

So like I I kind of think about like, you know, a a an above average day in a stock market is probably a plus one percent day, right? Like um crypto, if you kind of a 10x multiplier for me, at least in my mind, is that's what triggers it for me. Um, but I in some sense I've become numb to the the volatility um because it just have that long-term perspective and helps you ride through. So well, it could be a very emotional ride.

SPEAKER_03

Oh yeah. I've I've told our clients uh when we started this journey that this is a 10-year investment and we're one year into it. Yeah.

SPEAKER_05

I mean, if you if you if you're taking a one-year view at it only, it's been a rough year. Yeah. Because a year ago, Bitcoin is or we're coming up on it, but Bitcoin is roughly 125,000. Right. And this last week, um it fell to 60. So it's fifty down 50% in a year. Yeah. Um, that's not fun.

SPEAKER_03

No. No. Um now it it is a different than traditional retirement assets. Um, if you buy crypto uh by itself, there's no requirement of distribution. Although if it's inside an IRA, you still have the RMD. That's right, with because IRA. Yeah, because that's real related to the IRA, not the crypto. Um, currently there's no step up in cost basis if you pass away. So if you if you if you die and you own Coke stock and you paid 10 cents for it and now it's worth a dollar, your errors would get it at a cost basis of a dollar where crypto will stick to the basis.

Tax Rules, IRMAA, And Planning

SPEAKER_05

Basis, yeah. And I I would imagine crypto starts aligning with traditional rules as we get regulations. And I've beat this regulation drum to death. Yeah, um, we might be close. And we we we we seemingly are getting closer. Um the the ag committee has passed their part. The banking committee's literally has a I think a meeting as we are uh recording this at the White House number meeting number two with bank all the different people at the table, but largely the banking coalition there about uh stable coin um interests. So but we won't get on sidetracked on that. But at the end of the day, I think once we get this Clarity Act through, then you might start seeing guidance from the IRS um on how they deal with taxes, or Congress can kind of set the rules. But I don't believe that's part of this Clarity Act at this point.

SPEAKER_03

So also, you know, crypto could have some custody or access risk. I think there's less of that now. You can buy crypto in an ETF, which is pretty buttoned up. Right. But prior um people have their own wallets that can get stolen or lost passwords or bad actors.

SPEAKER_05

Um if you're doing the custody yourself, there is definitely higher risk. Yeah.

SPEAKER_03

Um there are some scams out there. We had a podcast recently about about the custody scams, but they're trying to use crypto and you're gonna invest in crypto and they take your money, and probably no money's actually being invested in crypto. Right.

SPEAKER_05

Uh so you would you wouldn't do this, you want to invest through reputable sources. You definitely hear these waves of people getting sent a link in an email to update the software that is their wallet, and it's compromised. And yeah, it's a very targeted attack. Um, and it's sad to hear because you know, at least admittedly lately, it's been, you know, the people that are on YouTube, the people that are on Twitter that are positively talking about crypto and trying to educate, and they get kind of get swept up in a in a in a phishing scam and they wake up the next day and their crypto's gone.

SPEAKER_03

Doesn't happen in the ETF.

SPEAKER_05

Correct. ETFs are not quite as exciting. You can't like hold and touch them, but um uh they they um definitely solve that problem. So I don't know.

SPEAKER_03

When do you think crypto shouldn't be in a uh retirement plan?

SPEAKER_05

If I mean I I know we said we're assuming it's a million-dollar portfolio, but if it's less than a million and you're near retirement, it's probably the wrong asset to have in there, yeah, just due to the downside risk.

SPEAKER_03

Um I I would say when your allocation um has to be super conservative because of your appetite for risk. Right. So if you if you're in a 40% stock portfolio, 60% bonds, right? You probably don't need to have any crypto inside of your portfolio.

SPEAKER_05

Yeah. In it but outside of that, you know, I I think crypto used to be very political. I think it's becoming less and less of that. So that probably is not a factor here. Yeah. Um but yeah, it's um I to me it should be part of our portfolios, but you understand the lens that's coming through when when I say that.

SPEAKER_03

So yeah. I mean, as the president of T Tongue Crypto Capital, everybody should have crypto in their portfolio, right? Right. Well uh but but as as a person who doesn't have um a dog in the fight, so to speak, uh, I I think that it's an asset class that should be in everyone's portfolio in a small dosage because this is the future. Right. And I don't know if it'll happen in my generation. Uh I hope it doesn't. But we, you know, I I I don't know that the US dollar is something that I want to put 100% of my faith in 20 years from now when all these when all these um all this debt comes due.

SPEAKER_05

Correct.

SPEAKER_03

So having the a Bitcoin something that doesn't get more doesn't duplicate, right? It is a finite number, uh, makes sense to me in a small percentage as we see how all this plays out.

SPEAKER_05

You know, that that that starts getting down the political rabbit hole a little bit around the dollar. And and I and I actually feel like it's a valid point.

SPEAKER_03

Um Well, I guess maybe political overall, but both parties have equally contributed to 100% problems.

SPEAKER_05

So both point fingers.

SPEAKER_03

Right. They point at each other, but Republican, Democrats, and independents have uh all contributed to this the debt issue.

SPEAKER_05

Yeah. I mean, we have it good in America largely because the dollar is the reserve currency of the world of the world.

SPEAKER_03

And we can manipulate it ourselves.

SPEAKER_05

Correct. Um and we make a lot of times other countries pay the price for us inflating our dollar, right? Which is just in a lot of ways, is in my opinion, immoral, but it it is what it is. Um but the challenge with it, I think, is you start to layer on stable coins these days, and stable coins are huge buyers of treasuries and short-term treasuries. Short-term treasuries that like in some ways they're propping up the problem they're trying to solve. Yeah. Um, or crypto is trying to solve, not necessarily stable coins, but it it's um we'll be interested to see it play out in the next, I guess, three to five years.

SPEAKER_03

So uh thinking about investments, we have to think about taxes. Those kind of go hand in hand, which is why we do tax planning here at our firm and not just manage investments. Um so we think about crypto. How is it how is crypto taxed?

SPEAKER_05

You know, short and long-term capital gains. I mean, it's no different than stocks at this point. Yep. Um and I the there was one loophole that was closed around taxes with crypto a year ago, um, with the passing of, I believe, the big beautiful bill, where you know, with stocks, if you want to like tax house harvest, you um can't rebuy that same asset for 30, 31 days, whatever the threshold is. In crypto, you all all you had to do is buy and sell it in a second and you could capture it. That is gone. Um yeah, it was kind of bummed personally. Um that was nice to be able to come and do that, right? But it also showed me that crypto was growing up a little bit um and they were trying to clean up the rules around it.

SPEAKER_03

So yeah. So really the tax strategy isn't much different than any other investment. You you want to harvest gains in your lower income years. Correct. So security pensions and and RMDs are all things that that go toward your income. So you have to coordinate your crypto sales um with with all those.

SPEAKER_05

I mean, and if crypto goes how we're kind of insinuating we think it might go, like you might have larger percentage gains in crypto than you might have elsewhere in your portfolio. So like yeah, you might have higher tax bill effectively coming from crypto. Um, you just have to kind of think through that.

SPEAKER_03

So uh and also just like any other investment, you have to think about Irma thresholds. So the more money you make in retirement, the higher they'll charge you for Medicare. Uh right now, I think it's around$209,000 a year before you go into the higher threshold. Got it. But if you uh your capital gains counts towards that. Uh so you have to make sure that any moves you're making um don't affect that because uh with Irma, they look back two years. Got it. Um so so if you had higher income one year for the next two years, you could be paying um double what your interest is. So it goes$185 a month all the way up to over$500 a month for the same service, depending on your income level.

SPEAKER_05

Thank you very much. Yes, yeah.

SPEAKER_03

So so yeah, so you have to think about that. Um what what what do you think is some common tax mistakes high net worth individuals are making with crypto?

SPEAKER_05

Have you seen anything that was like well, for the longest time, the the mistakes I saw people and whether they're a high net worth or not, I I'm not sure certain of is just people like thought, oh well, crypto, I can hide my cryptos, I can hide these, so I don't need to pay the tax on these games, which is just straight dumb. Um and definitely solves not tons of stories, but stories for people like getting audited, then then good luck. Yeah. Um because you you're gonna pay or you're gonna pay either with time in jail or you're gonna pay pay with the pocketbook or both. Exactly. Um but I I think that if people are doing their crypto kind of the vanilla way these days, so doing it through an ETF, taxes are easy. Yeah. You start getting into more exotic crypto products and taxes are still an absolute pain. Um, because there's there could be a million transactions.

SPEAKER_03

And there's no one, there's no 1099 issued by anybody. You have to go figure it out yourself.

SPEAKER_05

I mean, if you stay all within, say, Coinbase's walled garden, yeah. They they can issue a 1099. Um, but you start moving crypto around, doing stuff on DeFi, so it's kind of on the blockchain. Kind of again, this is where the Clarity Act, I think, is gonna help in some cases. Like following basis is really tough. And there's software out that tries to do it, but it it gets complex and um they they can generate um different tax um, you know, like a 1099 effectively for you that um is crypto focused. Um there's a I think it's 1099 DA, I think is the form. Yeah. Um and uh kind of help with that. But generally taxes are um a non-event these days.

Turning Gains Into Income And Rebalancing

SPEAKER_02

Before we jump back into the episode, do you know if you are ready to take off and launch into retirement? Get your pre-retirement checklist, a free guide from Wiser Wealth Management, from cash flow to social security. We've got your account down covered. Go to wiserinvestor.com slash guides to download your free guide today. Now let's get back to the episode.

SPEAKER_03

Let's let's kind of fast forward to a person who's retiring. Uh how do you return crypto into retirement income? I don't I don't know that you should really be thinking of it that way, honestly.

SPEAKER_05

I think you have to think about it as your whole portfolio, right? I mean, like it's in crypto is a part of that. Yeah. I I think the challenge in there may be this interim stage in crypto kind of leading up into this with uh withdrawal topic is like if crypto runs and runs hard over the next five years or 10 years, like when are you rebalancing? Like I that that's not necessarily in our notes here, but I think that it becomes part of this as a portfolio manager because it's you could have your your three percent allocation could turn into if you don't do anything, could turn into 15% or something. Like um so it's a it's a challenge um that I think everyone would welcome to have the problem, but it um it will ever make sense to sell crypto versus you just hold it forever. This this could be this this could be a whole topic for podcasts right here.

SPEAKER_03

Well, I know, but it that kind of goes into the legacy category of some we just have and we build we build wealth with us or I I you know I'm gonna kind of put some boxes around my answer here.

SPEAKER_05

So if you're buying a um a crypto that is an ETF, I feel like you can hold it for the long term and you're fine. Because there's rules about how they can get listed as ETFs that kind of start to help separate.

SPEAKER_03

Yeah.

SPEAKER_05

And I don't know, there's not even a dozen different tokens that have ETFs at this point. So there's not like a large pool to choose from. Right. You start getting outside of that, and say you open a Coinbase account and you start buying stuff. There's 200 or 300 different tokens. In my opinion, I don't know, at least half of those, I think, go to zero long term.

SPEAKER_03

Right.

SPEAKER_05

Okay. Well, you you're more gambling at that point, I would say, if you're buying stuff, because they're so so far down the market cap rankings that like people are looking for the next Bitcoin. Right. I mean, they're looking for a home run, a grand slam, a lottery ticket. You probably have better odds at the casino, quite honestly. Um so I I think that you just have to be smart about where you're buying. And I think if you stay in things that you could buy through a brokerage account, kind of use that as your, I guess, limiting uh threshold there, I think you would be in a better spot to not have to think about selling long term and just kind of hold.

SPEAKER_03

I think it's more of um how you think about it it's a tool, it's part of your portfolio. It's part should be on the gross side of your portfolio and you you trim it. So if it's at 4% and it goes grows to 10%, then you need to trim it back to four. Or if it's at four and it falls to two, you would add two percent more to get it back to four. Right. Uh I I think it's more it's it's it's a tool. I I obviously for the people who have maybe 50% of net worth in these things, then that may that's a you you need to have some type of a sell strategy. Yeah.

SPEAKER_05

Um, and you know, the people that have such a high percentage of their net worth in crypto are so like vulnerable, I think, to the idea of it running hard and all of a sudden they see their net worth balloon. Yeah. And that's where the mentality of, oh my gosh, I'm not selling because it's gonna go another, it's gonna, it's gonna three X from here.

SPEAKER_03

It's it's it's no different than people buy individual stock and they come into our firm and and they've held the stock for X, Y, Z time. And you know, I and it's just like they don't they got in, but they don't know when to get out, I guess. Correct. Um, I would just say that you have to set volatility parameters. Yes. Uh, but more importantly, you need to have probably two years of lifestyle reserve built in if you're gonna be crypto heavy. So you need to have cash.

SPEAKER_05

Well, yeah, two years for sure. I mean, because you know, there there's always been this four-year cycle, and I think we've talked about it a few times in the podcast. The question is, is it still holding or is it changing now that we're in this new phase of crypto? Right. Um so far it seems to be holding. Depending on how you squint to look at it. In one week. Um, in one week, yes. Um, so we'll see how the next couple months go, and I think that will kind of answer it because I think what we're starting to see is the four-year cycle, if anything is uh elongating um or kind of functionally goes away and you s you don't have the extreme highs or the extreme lows in the, I guess, again, the the maybe the assets that are ETFs, for instance, kind of like that that band of assets.

SPEAKER_03

So I think from my lens, you know, we're thinking like um Ethereum and Bitcoin and Solana, uh, those are all ETFs you can buy. Correct. But if someone is doing this on their own inside of Coinbase account, as you mentioned earlier, yeah, it it falls into no different than picking individual stocks where you have emotional traps when trying to sell your winners. You say, Oh my gosh, I've made this much here. It could go higher and I want to sell it. And you you kind of have to have a game plan. Maybe it could be as simple as I have four coins that I've chosen and this twenty five percent allocation, and then I'm gonna rebalance this every so often.

Custody Risks, Scams, And ETFs

SPEAKER_05

You know, I think this the difference I would kind of paint there between uh a somebody stock picking versus somebody crypto picking is stocks, there's a ton of regulations around what those companies can and can't do. And how they can and can't talk and do things. They got the quiet periods and all the things. Manipulation. Reporting. Yeah. None of that exists for crypto. Yeah. So you have a lot of manipulation. You have a lot of cryptos. Well, and in it, at the end of the day, like there's no policing organization because they're because they're global too. Yeah. Um, just because it's listed on Coinbase doesn't mean that it's like some like ordained safe, right? Right. Um, Coinbase has got their rules and they've loosened them over time in Italy to get more things listed. Yeah. Um so it it the challenge is picking um the right thing. So I I would never suggest anyone buy something that's outside the top hundred market cap coins. I mean, there's thousands of these things. I think you start getting that far down the market cap list and you the risk is incredibly high. Yeah. You have to really know what you're doing.

SPEAKER_03

So if you if you have an ETF inside your portfolio of of crypto, um, it easily transfers to the next generation just like anything else in your portfolio. Right. Right. Assuming that you have a revocable living trust set up or a will, um, even if it goes through the probate process with with no will in place, um, it'll be fine.

SPEAKER_05

Yes. Right.

SPEAKER_03

But the problem lies with these private wallets and private investments, uh, or even maybe a Coinbase account that doesn't have a uh login, right?

SPEAKER_05

Correct. I mean, I I think that you can designate. You can.

SPEAKER_03

You designate a person, but if you didn't designate a person, uh you could have a problem. So that that creates some estate planning challenges that I think are unique to crypto, where that you need to make sure that there's access to to those coins.

SPEAKER_05

I I I often hear people talk about like the estate and like legacy or the the passing down of crypto assets, much like people that were gold bugs that would hide gold in their house and their family members wouldn't know about it and they'd find it when they're stuck doing the estate sale. At least they could find it. Crypto, you're just not gonna I mean, unless you find the password written down somewhere, it to your point, it is gone. Yeah. Um, it's on the blockchain, um, but like functionally gone to the family. So right.

SPEAKER_03

There's been big stories in the past that people haven't lost it. One guy threw away a password, and yeah, he was offering what millions of dollars to sort through at the at the uh dump. Right. He recently gave up.

SPEAKER_05

He he spent like$15 million digging. He's in the UK. Oh he raised money. Um, I think it was$15 million or$50,$1,200$5-0 there. I but at the end of the day, he recently gave up and called it off. Um, because the hit the Bitcoin that's on that hard drive or whatever it is that was in the in the dump, um, I want to say it's like$300 million at this point.

SPEAKER_03

That's crazy.

SPEAKER_05

So risk reward. That's crazy. Um you know, that wasn't necessarily like a legacy handing down. He was purely like um uh, you know, when Bitcoin wasn't worth anything, threw it away, didn't think much of it, all of a sudden one day done. There's there's some Bitcoin.

SPEAKER_03

So yeah, it wasn't just sent to the dump. It'd been in the dump for a long time. Right. Yeah, that's why you didn't find it interesting. Um, so yeah, so you think about lost assets like his, um, lost uh that's money that can't go to the next generation. Uh as far as gifting strategies, I I don't know that um it's any different than anything else that we could talk about. Uh if you have Bitcoin or any of these coins, you can gift that into a donor advice fund just like you could Coca-Cola stock. Yeah, uh you could use a trust to to gift it. Um you still have the lifetime exemption of right now it's$15 million per spouse. That that uh crypto is is subject to to that limitation. There's really no difference there. Yep. Uh I think the important thing is if you have it outside a uh traditional um platform, that's where you're going to have to have a third party who I think should be storing that information for you.

SPEAKER_05

Yep. And you're and you're starting to see I wouldn't uh call them startups, but um these businesses pop up that are trying to help with that legacy piece. Yeah. Yeah, for specifically for you know holders of that self-custody. Yep.

SPEAKER_03

So uh not just that, but also probably all the other passwords that we probably should be handing. Our digital lives are rather complex. Yes. Yeah, exactly. Which is why you should be using something like a one password or a last pass. Yes, a password manager. And have a password manager, and you have one password to get into the password. It's it's like the book written down in your house as all this all the stuff written down. Yes with the same password used over and over again until they made you add an exclamation point. And then eventually they made you add another exclamation point. So you you know you added another there. But um, yeah, it's just like that except it's digitized. Yes. And and you should be using scrambled passwords that no one can remember. Right. Uh, but yeah, you in fact um it's built into our uh it's built into our um browsers now, so Google can have it too.

SPEAKER_04

Correct. Yes.

SPEAKER_03

Yes. But better than your family losing it, I guess. It's like Google house it, but Apple has that built into their phones. Uh what do they call it? Um is it uh key key something or something? Keychain, I think. Keychain, yeah. So yeah, I would prefer to use a third party, like a one password or a last pass, one password, preferably. Um, because it it's separate from the browsers and the computer and it's stored in separate clouds.

SPEAKER_05

And it can and the they generally can store more than just passwords. They can store um bank details, they can store you can have a pretty good um, I guess, uh collection of your digital life um and financial life in there.

SPEAKER_03

Um to yeah, I I think that the point from the legacy uh standpoint is is really uh nothing really changes there just because it's crypto. All the traditional vehicles that we use in planning uh would would still apply. Um which kind of takes us to our next point, risk management and uh and planning integration. I I think that um custody is getting better than when we start first started doing our podcast, probably what, five years ago. Right.

SPEAKER_04

Yeah.

SPEAKER_03

Uh in fact, we had a whole podcast on where to cut where to custody stuff, I think, back in the day. Uh Coinbase seems to be the number one go-to right now.

SPEAKER_05

Yeah, I mean, it's certainly the biggest name brand um in the US to do that. Um, and it kind of helps alleviate that as long as you're protecting your Coinbase account. Um, I think that's obviously they they they enforce that, but it that I I want to emphasize just because you put keep your coins on Coinbase doesn't mean that you can be lax with your password or your two-factor authentication. Right. Um you have to do your part.

SPEAKER_03

So yeah, true. Um you know, we we have uh uh there's less less rules around crypto, so you had to be careful and vigilant from that standpoint. Yeah. Uh and I I wouldn't necessarily uh you know, I'm sure people get this question when people are joining your fund, but most of the people in your fund actually know you, so that that that that helps it. But yeah, um it's like there are a lot of a lot of schemes out there.

SPEAKER_05

Yeah, I mean there's movies um about fund managers running off with tokens, right? Faking their deaths, all the different things. Right. Um, but yes, that there's ways to do custody when you got get into these more complex you know products like a fund where you know technically I don't even mean um control all the assets from a custody perspective. We have custody provider and we have to bring multiple keys together, multiple passwords together to make a transaction. So it kind of gives investors a peace of mind um that you know I can't just become a bozo and run off with things easily. Um, but also it kind of protects it protects me too. So if I lose it, there's kind of this way to kind of if I lose my part of the key. Yeah. Um there's a way for us to kind of bring it all back together. So kind of some redundancies built in there.

SPEAKER_03

Um all right. So let's talk about some takeaways, closing thoughts. Um you know, I think crypto could potentially require more planning, but uh depends on where it's held. Correct. Uh what it is, right? Uh I think that takes coordination in your planning between your financial advisor, the CPA from a tax perspective, and then really the estate planning attorney from from maybe dock having to document some of this, potentially.

Risk Management, Custodians, And Controls

SPEAKER_05

Yeah, I would say if you're self-custoding, the complexity is way higher. If you're not self-custing or you're doing it through an ETF, it's no different than owning some Coca-Cola stock, right? Right. Right. Um, so yes.

SPEAKER_03

Which is how, by the way, just to cut down on my phone calls, that's how we handle it all here, wiser. Yes. We only use the ETFs. We do we don't we don't use any third party. So so yes, it's it's all buttoned up very tightly.

unknown

Yeah.

SPEAKER_05

It you know, it takes risk off at Wiser, it takes risk off the clients. It's it's it's great for everybody. Um but yes, it's you know, I I I hope over time crypto gets to a spot where the vast majority and the vast majority being, I don't know, 95 plus percent use some kind of regulated product that holds it. So custody isn't part of the conversation every time we talk about this stuff. Because, you know, custody is important, super important, especially when it's self-custody, because you get it wrong. Either you're you don't get to pass it down to the next generation or you lose it yourself. Like um, the bad scenarios are just all straight bad. Like there, there's no like half bad scenario there. Um so you just be indulgent about what you're planning. You know, if you're doing self-custody, you know, some of the ways to kind of help mitigate you yourself losing it. Yeah, you use password manager, but you could the backup for those wallets you can keep in a on a piece of paper, for instance, with an estate attorney, or you can or safe deposit box. There's ways to kind of push um or lessen the risk because you're diversifying kind of the storage of the backup. So yeah.

SPEAKER_03

And I think from an investment standpoint, crypto it doesn't make things more complicated if you're using the ETFs uh in a normal traditional manner. It could create more uh complexity, like I said, if you held it um outside uh outside of your your portfolio, normal portfolios. Uh well, thank you, Robert. If you guys want to learn more about Teton Crypto Capital, we've linked them directly into our podcast notes here. Uh if you have a minute, uh, we'd really appreciate if you go on and leave us a review uh for this podcast wherever you're listening. That helps us uh in our rankings and podcast world. But uh thanks for listening to today's episode uh with our guest, Robert Schwarthout. Um if you'd like to meet with one of our uh WiserWells Fiduciary financial advisors to talk about crypto or uh even to start your own financial planning, you can do so by going to wiserinvestor.com. Thanks, guys. We'll see you next week.

Key Takeaways And Next Steps

SPEAKER_00

Thanks for listening to a wiser retirement podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wiserinvestor.com and reach out. This podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets, or any other investment vehicles or basis to make any financial decisions. Wiser Death Management Incorporated is a registered investor advisor with the SEC. The host and or guest may personally own securities, digital assets, or other investment vehicles mentioned on this podcast. Neither the host nor guest of the show are compensated for their participation, and no referral fees are paid to or received by any host or guest for clients, listeners, or similar interests. Investments involve risk, and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional, andor legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.