Here's the reality: Dogecoin (CRYPTO:DOGE) could make you a fortune, possibly even enough to retire depending on how much you already have saved. But the odds of that happening are pretty slim. And when you're talking about your life's savings, it's a risk you probably don't want to take. 

Why Dogecoin isn't a good fit for your retirement portfolio

Dogecoin, like all cryptocurrencies, is a relatively new concept and the entire industry is highly speculative right now. It could see widespread adoption over the next few decades or it could fizzle out. While investing in anything carries risk, investing your retirement savings in cryptocurrency is taking a much larger risk than investing in the stocks of established businesses. If the industry takes a dive, you could lose everything you've worked for. 

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Investing in Dogecoin is even riskier than investing in Bitcoin, the original cryptocurrency, because Bitcoin has been around the longest and some companies are beginning to adopt it. Dogecoin, by contrast, was created as a joke, kept alive by funny dog memes and a cult Reddit following, and rose to popularity just a few months ago thanks to tweets from Tesla CEO Elon Musk.

Dogecoin wasn't created with any practical use in mind and there isn't anything significant to differentiate it from the thousands of other altcoins available today. There's also no limit on how many Dogecoins can be mined, and as more become available, the ones that already exist will become less valuable. None of that bodes well for its long-term performance.

Safer ways to cash in on the cryptocurrency craze

Rather than investing your retirement savings in Dogecoin or any other cryptocurrency directly, consider investing some of your money in cryptocurrency stocks instead. These are stocks of companies that stand to benefit from widespread cryptocurrency adoption. But they're also strong businesses in their own right, so even if cryptocurrency doesn't ever hit the mainstream, you could still profit from investing in them.

You could also invest some money directly in cryptocurrency if you have cash to spare and don't mind taking on a lot of risk. But you should keep this money separate from your retirement savings and focus on building your retirement savings first.

If you don't feel comfortable choosing individual stocks, consider sticking your retirement money in an S&P 500 index fund. This instantly gives you part ownership in 500 of the largest companies in the U.S. They're from many different industries, so your money is well diversified in a single purchase. S&P 500 index funds are also pretty affordable and they tend to generate strong returns over time, though like any other investment, they're not immune to the occasional dip in value.

Take the money you normally set aside for retirement and put it in one of these funds or some other safer investments. Then, if you'd like to invest some money in Dogecoin or another cryptocurrency, you can use any extra cash you have left over for this.

Don't invest any money in cryptocurrency that you're not willing to lose and spread your money around between several cryptos rather than investing in just one. It might not make you wealthy as quickly as betting big on Dogecoin and timing the market just right, but it's a much surer bet over the long run.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.