📊 Based on a Reddit discussion with over 100,000 views and 125 comments
A few days ago, I asked an honest question on Reddit: “What’s the actual plan for using Bitcoin in retirement?” The responses were overwhelming – and revealed 5 completely different strategies.
🎯 The Context
The question was simple: You’ve accumulated Bitcoin over years. You’re retiring. You need monthly income. What do you do?
Sell and pay capital gains tax? Borrow against Bitcoin and pay interest? Just hold and live off pension? The community had strong opinions – and all made sense.
💡 Important: This is not financial advice. I’m simply sharing what real people discussed on Reddit – with all pros and cons.
📊 The 5 Main Strategies
Strategy 1: “Just Sell It” – Simplicity Above All
“Buy bitcoin forever, sell when u need it. Why do people over complicate it. Any other investment when you need money you would sell…Same with bitcoin the other option is borrowing against it which I don’t do just yet maybe as I near my goals and don’t want to sell”
— jscestrachan, 76 Upvotes
The Idea:
- Bitcoin is an investment like any other
- When you need money → you sell
- No complicated strategies
- Maybe lending later, but not now
Pros:
- ✅ Extremely simple to execute
- ✅ No interest costs
- ✅ No liquidation risks
- ✅ You keep control of your Bitcoin
Cons:
- ❌ Capital gains tax (up to 37% in US)
- ❌ You irreversibly sell Bitcoin
- ❌ No optimization possible
For whom? Pragmatists who value simplicity and don’t trust lending.
Strategy 2: Tax-Optimized Selling – Smart Selling
“This. Depending on the country you are living in, chances are you pay only 10-15% tax, or even none at all. Just sell like 3-4-5% of your stack every year, you probably still get richer because bitcoins cagr is way above 5%, so you can do this probably into eternity, or until you die.”
— Generationhodl, 21 Upvotes
The Idea:
- Sell 3-5% of your stack annually
- Bitcoin CAGR is historically >20% per year
- Your stack grows faster than you sell
- Tax optimization depending on country (10-15% instead of 37%)
The Math:
- Bitcoin rises 30% per year on average
- You sell 5% per year
- Your stack still grows ~25% annually
- You have income AND your wealth increases
Pros:
- ✅ Tax optimization possible (use allowances)
- ✅ Your stack can still grow
- ✅ Predictable withdrawals
- ✅ No custody risk with lending platforms
Cons:
- ❌ Only works with positive Bitcoin performance
- ❌ Brutal in bear markets
- ❌ You’re still selling Bitcoin
For whom? Long-term holders with strong conviction that Bitcoin will keep rising.
Strategy 3: Sequence of Returns Strategy – Timing Is Everything
“Option 2 but depending on adoption/price by then. If lower than expected then I’d keep around 3 years income requirement in cash/money market funds and take income from that first and only replenish it from BTC when its price is relatively high. Read up about sequence of returns risk when taking retirement income from a volatile asset.”
— Bred_Slippy, 16 Upvotes
The Idea:
- Keep 3 years of cash reserves
- Only sell Bitcoin at high prices
- During bear markets: Live off cash reserves
- Avoid “Sequence of Returns Risk”
What is Sequence of Returns Risk?
If you must sell during a crash, you destroy your portfolio. Example: Bitcoin drops 50% → You must sell twice as much Bitcoin for the same income.
The Solution:
- 3 years of living expenses in cash/stablecoins
- Only sell Bitcoin at >$80k (or your target)
- During crashes: Wait it out with cash reserves
Pros:
- ✅ Protection from timing risk
- ✅ You never sell during a crash
- ✅ Emotional peace
- ✅ Flexibility
Cons:
- ❌ Requires large cash reserve (opportunity cost)
- ❌ Complex to manage
- ❌ Inflation eats cash reserves
For whom? Risk-aware investors with sufficient capital for cash buffer.
Strategy 4: “Bitcoin IS Money” – Philosophical Position
“Wasn’t the original idea that Bitcoin was going to be money so you wouldn’t need to sell it to spend it?? Otherwise, I completely agree with you.”
— SidOfBee, 6 Upvotes
The Idea:
- Bitcoin is money, not an investment
- You don’t “sell” money – you spend it
- Vision: Bitcoin payments for living expenses
- No conversion to fiat needed
The Reality in 2025:
- Only few merchants accept Bitcoin
- Lightning Network not yet mainstream
- Tax complexity with every purchase
- But: Development is heading this direction
Pros:
- ✅ Philosophically consistent with Bitcoin vision
- ✅ No sales = no taxable events
- ✅ You stay on the Bitcoin standard
Cons:
- ❌ Not yet practical today
- ❌ Infrastructure missing
- ❌ Tax gray area in many countries
For whom? Bitcoin maximalists with long time horizons and alternative income sources.
Strategy 5: Cautious Lending – Waiting for Better Times
“My hope is that by the time i want to retire, there will be really dependable options to borrow against btc. If not, ill have some in a trust for those I intend to leave some to, and cash out the rest as needed to fund my living expenses. Either way sounds good. 👍”
— EnvironmentalLaw4056, 4 Upvotes
The Idea:
- Lending would be ideal – but not safe enough yet
- Wait for established providers (Fidelity, JP Morgan)
- Backup plan: Traditional selling
- Stay flexible
Why the Skepticism?
“Just don’t do it with a startup. In hindsight giving up custody for startups like Celsius was a risky move despite what Mr Mashinsky claimed. I’m waiting for Fidelity or JP Morgan to offer it.”
— rjm101, 2 Upvotes
The Celsius Trauma:
- Celsius, BlockFi, Voyager – all insolvent in 2022
- Users partially lost everything
- “Not your keys, not your coins” applies to lending too
- Trust in crypto lending severely damaged
Pros:
- ✅ Realistic and cautious
- ✅ Backup plan available
- ✅ Learns from the past
Cons:
- ❌ Might wait forever
- ❌ Missing potential opportunities now
- ❌ Even established providers have risks
For whom? Cautious investors who learned from the 2022 crashes.
📊 Comparison Table
| Strategy | Simplicity | Tax Efficiency | Risk | Feasible Today? |
|---|---|---|---|---|
| Just Sell | ⭐⭐⭐⭐⭐ | ⭐⭐ | ⭐⭐ | ✅ Yes |
| Tax-Optimized | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐ | ✅ Yes |
| Sequence Strategy | ⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐ | ✅ Yes |
| Bitcoin IS Money | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐ | ❌ No |
| Cautious Lending | ⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⚠️ Partially |
🧮 Which Strategy fits?
Test all lending strategies with real numbers in our calculator:
Bitcoin Lending Calculator →🤔 What’s the “Right” Strategy?
The honest answer: There isn’t one.
Each strategy makes sense in a specific context:
- Low Bitcoin conviction? → Just Sell
- High conviction + large stacks? → Tax-Optimized or Sequence Strategy
- Bitcoin maximalist? → Bitcoin IS Money (long-term)
- Cautious after 2022? → Cautious Lending with backup plan
⚠️ My Personal Opinion: Most will run a hybrid strategy: Sell some, borrow against some, just hold some. Flexibility is more important than dogmatic purity.
🔗 Further Resources
- Bitcoin Refinancing Calculator – Model your own strategy
- Lending Platforms Comparison – If you want to test Strategy 5
- FAQ & Risks – What you need to know
- Original Reddit Discussion – 82,000 views, 125 comments
💬 Your Opinion?
These 5 strategies came from a real discussion with 125 comments. What’s your strategy? Or do you have a completely different idea?
⚠️ Disclaimer: This article is not financial advice. All mentioned strategies have significant risks. Bitcoin is extremely volatile. Lending platforms can become insolvent. Consult a qualified financial advisor before making decisions. Only invest what you can afford to lose.