US Lawmakers Introduce Bill Allowing Crypto Investments in 401(k) Retirement Plans

The Retirement Savings Modernization Act was introduced by several U.S. legislators to give 401(k), retirement savers access a wide variety of investments, including crypto assets. U.S. Senator Pat Toomey stated that Americans are rightfully worried about their financial future due to record-breaking inflation, a stock market decline, and the possibility of a recession. Senator Pat Toomey.

Retirement Savings Modernization Law Introduced

Thursday's announcement by the U.S. Senate Committee on Banking, Housing, and Urban Affairs was that Senators Pat Toomey (Republican-PA), Tim Scott (Republican-SC), and Representative Peter Meijer, (Republican-MI) had introduced the Retirement Savings Modernization Bill.

According to the announcement, the bill is designed "to boost Americans' retirement savings through allowing workers diversify assets in defined contribution plans such as 401(k). Plans." This legislation will amend the Employee Retirement Security Act of 1974 (ERISA). It will clarify that private sector retirement plan sponsor may offer plans that are prudently diversified across all asset classes, including pensions and 401ks.

Senator Toomey stated, "With inflation at record levels, a stock market decline, and a possible recession on the horizon," further explaining:

My legislation will allow millions of Americans to enjoy a more secure retirement by allowing 401(k), savers to have access to the same asset types as pension plans.

Although pension plans and 401 (k) plans are both covered by the same law since 1982, the former have included asset classes that are not available in the public market. The announcement states that the former "almost never include exposure to alternative assets because fiduciaries' expected litigation risk." "Digital assets" are listed as "covered investments" in the bill.

Senator Scott said: "Inflation eroded and devalued many Americans' savings many Americans have spent their lives building. The bill would modernize retirement plans so that they can offer divers investments with higher returns. American workers and their families deserve peace of mind knowing that their hard-earned savings will be protected when they retire.

The majority of Americans who worked in the private sector depended on their pension plans to retire until the 1970s. The vast majority of workers in the private sector today rely on 401 (k) plans. The lawmakers pointed out that pension plans have always outperformed 401 (k) plans due to their ability to diversify across a wide range of asset classes. They also put one in every five dollars into alternative asset classes such as private equity.

Representative Meijer stressed:

Americans should have flexibility in their retirement plans, especially during times of fiscal uncertainty.

In March, the U.S. Department of Labor issued a warning regarding crypto investments in 401 (k) plans. The DOL stated that "The department has serious concerns regarding the prudentiary of a fiduciary’s decision to expose participants to a 401k plan’s investments in cryptocurrency, or other products which have a value tied to cryptocurrencies," These investments pose significant risks to retirement accounts of participants, including theft, fraud, and loss.

Fidelity (a major administrator of 401(k), plans) announced that bitcoin will be allowed as an investment option in its new products in April, despite warnings from the Labor Department. The Labor Department was concerned by the decision of Fidelity, a financial giant. Senator Elizabeth Warren (D.MA) is also concerned and demands answers from Fidelity about its decision to allow Bitcoin in 401(k).

A U.S. senator introduced legislation in May that would prohibit the Labor Department's interference with retirement account investments. Janet Yellen, U.S. Treasury Secretary, stated that crypto was "very risky" and that it is not suitable for most retirement savers.

Are you a believer that all retirement savers should have the ability to invest in cryptocurrencies? Comment below to let us know your thoughts.

Frequently Asked Questions

Can I buy Gold with my Self-Directed IRA?

Although you can buy gold using your self-directed IRA account, you will need to open an account at a brokerage like TD Ameritrade. If you have an existing retirement account, you can transfer funds to another one.

The IRS allows individuals up to $5.500 annually ($6,500 if you are married and filing jointly). This can be contributed to a traditional IRA. Individuals can contribute as much as $1,000 per year ($2,000 if married filing jointly) to a Roth IRA.

If you do decide you want to invest your money in gold, you should look into purchasing physical bullion instead of futures contracts. Futures contract are financial instruments that depend on the gold price. You can speculate on future prices, but not own the metal. You can only hold physical bullion, which is real silver and gold bars.

Is it a good idea to open a Precious Metal IRA

Precious metals are not insured. This is the most important fact to know before you open an IRA account. You cannot recover any money you have invested. This includes any loss of investments from theft, fire, flood or other circumstances.

Investing in physical gold and silver coins is the best way to protect yourself from this type of loss. These items can be lost because they have real value and have been around for thousands years. You would probably get more if you sold them today than you paid when they were first created.

If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. You should also consider using a third party custodian to protect your assets and give you access at any time.

Remember that you will not see any returns unless you are retired if you open an Account. Don't forget the future!

What are some of the advantages and disadvantages to a gold IRA

The main advantage of an Individual Retirement Account (IRA) over a regular savings account is that you don't have to pay taxes on any interest earned. This makes an IRA a great choice for people who are looking to save money but don’t want to pay any tax on the interest earned. This type of investment has its downsides.

If you withdraw too many funds from your IRA at once, you may lose all your accumulated assets. You may also be prohibited by the IRS from making withdrawals from an IRA after you turn 59 1/2. You will likely have to pay a penalty fee if you withdraw funds from an IRA.

The downside is that managing your IRA requires fees. Many banks charge between 0.5% and 2.0% per year. Other providers charge monthly management costs ranging from $10-50.

If you prefer to keep your money outside a bank, you'll need to purchase insurance. A majority of insurance companies require that you possess a minimum amount gold to be eligible for a claim. You may be required by some insurers to purchase insurance that covers losses as high as $500,000.

If you choose to have a gold IRA you will need to establish how much gold to use. Some providers limit how many ounces you can keep. Others let you choose your weight.

You will also have to decide whether to purchase futures or physical gold. Gold futures contracts are more expensive than physical gold. Futures contracts, however, allow for greater flexibility in buying gold. They enable you to establish a contract with an expiration date.

It is also important to choose the type of insurance coverage that you need. The standard policy doesn't include theft protection or loss due to fire, flood, or earthquake. However, it does cover damage caused by natural disasters. If you live near a high-risk region, you might want to consider additional coverage.

Additional to your insurance, you will need to consider how much it costs to store your gold. Storage costs are not covered by insurance. For safekeeping, banks typically charge $25-40 per month.

Before you can open a gold IRA you need to contact a qualified Custodian. A custodian keeps track of your investments and ensures that you comply with federal regulations. Custodians cannot sell your assets. Instead, they must keep your assets for as long you request.

Once you have chosen the right type of IRA to suit your needs, it is time to fill out paperwork defining your goals. You should also include information about your desired investments, such as stocks or bonds, mutual funds, real estate, and mutual funds. It is also important to specify how much money you will invest each month.

After completing the forms, send them along with a check or a small deposit to your chosen provider. The company will review your application and send you a confirmation letter.

You should consult a financial planner before opening a Gold IRA. Financial planners are experts in investing and will help you decide which type of IRA works best for your situation. They can also help you lower your expenses by finding cheaper alternatives to purchasing insurance.


  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (
  • If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (
  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (
  • If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (
  • This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (

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The History of Gold as an Asset

From the ancient days to the early 20th Century, gold was a common currency. It was accepted worldwide and became popular due to its durability, purity, divisibility, uniformity, scarcity, and beauty. Because of its intrinsic value, it was also widely traded. Because there were no internationally recognized standards for measuring and weighing gold, the different weights of this metal could be used worldwide. For example, one pound sterling in England equals 24 carats; one livre tournois equals 25 carats; one mark equals 28 carats; and so on.

In the 1860s, the United States began to issue American coins made from 90% copper, 10% Zinc, and 0.942 Fine Gold. This caused a drop in foreign currency demand which resulted in an increase of their prices. In this period, large amounts of gold coin were minted by the United States, which caused the gold price to drop. Because the U.S. government had too much money coming into circulation, they needed to find a way to pay off some debt. They decided to return some of the gold they had left to Europe.

Since most European countries were not confident in the U.S. dollar they began accepting gold as payment. However, many European nations stopped using gold to pay after World War I and started using paper currency instead. The gold price has gone up significantly in the years since. Although the price of gold fluctuates today, it remains one of your most safe investments.

By: Kevin Helms
Title: US Lawmakers Introduce Bill Allowing Crypto Investments in 401(k) Retirement Plans
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Published Date: Sat, 01 Oct 2022 02:30:10 +0000

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