US lawmakers approve bill that allows crypto investment in 401k 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 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." The bill includes "digital assets" in the definition of a "covered investment."

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

Should You Buy or Sell Gold?

In the past, gold was considered a haven for investors during economic turmoil. Many people today are moving away from stocks and bonds to look at precious metals, such as gold, as a way to diversify their investments.

Gold prices have been on an upward trend over recent years, but they remain relatively low compared to other commodities such as oil and silver.

Some experts think that this could change in the near future. Experts believe that gold prices could skyrocket in the face of another global financial crisis.

They also note that gold is increasingly popular because of its perceived intrinsic value and potential return.

Consider these things if you are thinking of investing in gold.

  • The first thing to do is assess whether you actually need the money you're putting aside for retirement. It is possible to save for retirement while still investing your gold savings. That said, gold does provide an additional layer of protection when you reach retirement age.
  • Second, be sure to understand your obligations before you purchase gold. Each type offers varying levels and levels of security.
  • Don't forget that gold does not offer the same safety level as a bank accounts. Your gold coins may be lost and you might never get them back.

Don't buy gold unless you have done your research. Make sure to protect any gold you already own.

Can I hold physical gold in my IRA?

Not just paper money or coins, gold is money. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Today, investors use gold as part of a diversified portfolio because gold tends to do better during financial turmoil.

Many Americans now invest in precious metals. It's not guaranteed that you'll make any money investing gold, but there are several reasons it might be worthwhile to add gold to retirement funds.

Gold has historically performed better during financial panics than other assets. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. During those turbulent market conditions, gold was among the few assets that outperformed stocks.

Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Your shares will still be yours even if your stock portfolio drops. But if you own gold, its value will increase even if the company you invested in defaults on its debt.

Finally, gold offers liquidity. This means that you can sell gold anytime, regardless of whether or not another buyer is available. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you to profit from short-term fluctuations on the gold market.

How much money should my Roth IRA be funded?

Roth IRAs can be used to save taxes on your retirement funds. These accounts cannot be withdrawn until you turn 59 1/2. However, if you do decide to take out some of your contributions before then, there are specific rules you must follow. First, your principal (the original deposit amount) cannot be touched. You cannot withdraw more than the original amount you contributed. If you decide to withdraw more money than what you contributed initially, you will need to pay taxes.

The second rule is that your earnings cannot be withheld without income tax. Also, taxes will be due on any earnings you take. Let's assume that you contribute $5,000 each year to your Roth IRA. In addition, let's assume you earn $10,000 per year after contributing. This would mean that you would have to pay $3,500 in federal income tax. You would have $6,500 less. This is the maximum amount you can withdraw because you are limited to what you initially contributed.

So, if you were to take out $4,000 of your earnings, you'd still owe taxes on the remaining $1,500. In addition, 50% of your earnings will be subject to tax again (half of 40%). You only got back $4,000. Even though you were able to withdraw $7,000 from your Roth IRA,

There are two types: Roth IRAs that are traditional and Roth. Traditional IRAs allow for pre-tax deductions from your taxable earnings. When you retire, you can use your traditional IRA to withdraw your contribution balance plus interest. There are no restrictions on the amount you can withdraw from a Traditional IRA.

Roth IRAs won't let you deduct your contributions. But once you've retired, you can withdraw the entire contribution amount plus any accrued interest. There is no minimum withdrawal requirement, unlike traditional IRAs. You don't have to wait until you turn 70 1/2 years old before withdrawing your contribution.


  • The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (
  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (
  • You can only purchase gold bars at least 99.5% purity. (
  • Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (
  • 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. (

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Investing in gold vs. investing in stocks

It might seem risky to invest in gold as an investment vehicle these days. The reason behind this is that many people believe that gold is no longer profitable to invest in. This belief is due to the fact that many people see gold prices dropping because of the global economy. They believe they would lose their money if they invested gold. In reality, however there are still many significant benefits to gold investing. We'll be looking at some of these benefits below.

One of the oldest currencies known to man is gold. Its use can be traced back to thousands of years ago. It is a valuable store of value that has been used by many people throughout the world. It is still used as a payment method by South Africa and other countries.

You must first decide how much you are willing and able to pay per gram to decide whether or not gold should be your investment. If you're interested in buying gold bullion, it is crucial that you decide how much per gram. You could contact a local jeweler to find out what their current market rate is.

Noting that gold prices have fallen in recent years, it is worth noting that the cost to produce gold has gone up. The price of gold may have fallen, but the production costs haven’t.

Another thing to remember when thinking about whether or not you should buy gold is the amount of gold you plan on purchasing. It makes sense to save any gold you don't need to purchase if your goal is to use it for wedding rings. But, if your goal is to make long-term investments in gold, this might be worth considering. You can profit if you sell your gold at a higher price than you bought it.

We hope our article has given you a better understanding of gold as an investment tool. We strongly recommend that you research all available options before making any decisions. Only after you have done this can you make an informed choice.


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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