Retirement expert on crypto investing: 'Not a space you want to be in'

The recent collapse of crypto exchange FTX and its continuing fallout show how volatile the crypto market can be, one money expert said, noting that cryptocurrency shouldn't be part of funding retirement.

"We [retirement planners] never ventured into the Bitcoin world or the cryptocurrency world or any of that. We talked about it. We laughed about it," Ken Moraif, CEO of Retirement Planners of America and a senior adviser, recently told Yahoo Finance Live (video above). "A lot of times, people said, man, we're missing out. And I'm like, no, you're not. That's not a space you want to be in."

Instead of cryptocurrency, Moraif advises people saving for retirement — especially those in their 50s — to minimize risk in their portfolios.

"We go with the traditional plain vanilla stocks and bonds, diversified portfolios," Moraif said.

FUYANG, CHINA - NOVEMBER 12, 2022 - Financial Illustration: Bitcoin, Shiyan City, Hubei Province, China, November 12, 2022. November 12, 2022 -- Bitcoin and other cryptocurrencies have fallen, cryptocurrency exchange FTX and its affiliates have begun filing for bankruptcy protection, and founder Sam Bankman-Fried will step down as CEO. The price of bitcoin has fallen more than 4 percent in the past 24 hours to $16,775, after trading at around $17,500. (Photo credit should read CFOTO/Future Publishing via Getty Images)
FUYANG, CHINA - NOVEMBER 12, 2022 - Financial Illustration: Bitcoin, Shiyan City, Hubei Province, China, November 12, 2022. November 12, 2022 -- Bitcoin and other cryptocurrencies have fallen, cryptocurrency exchange FTX and its affiliates have begun filing for bankruptcy protection, and founder Sam Bankman-Fried will step down as CEO. The price of bitcoin has fallen more than 4 percent in the past 24 hours to $16,775, after trading at around $17,500. (Photo credit should read CFOTO/Future Publishing via Getty Images)

He said people saving for retirement should have a diversified portfolio based on their hurdle rate, which is the rate of return an investor needs to support their lifestyle once they're retired.

"If your hurdle rate is 5%, then that would dictate a different investment portfolio than if your hurdle rate is 8%. The construction of your portfolio needs to be determined by how much risk is appropriate for you," Moraif said.

However, even stocks and bonds may not be safe enough for Moraif's clients. He told Yahoo Finance Live about how he and other retirement planners are using the invest-and-protect strategy to help clients put funds in high-yield money market savings accounts when stocks and bonds have too much risk.

"Currently, we are in the money market fund and our best friend in the whole world is the Federal Reserve. We love those guys," Moraif said. The Federal Reserve this month raised interest rates by 75 basis points to help rein in inflation.

"What they're doing right now is they're raising interest rates," he said. "And every time they do, interest rates in the money market fund goes up."

Ella Vincent is the personal finance reporter for Yahoo Money. Follow her on Twitter @bookgirlchicago.

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