Numerous U.S. senators called for Fidelity Investments' reconsideration of allowing bitcoin to be included in 401(k), retirement plans. Abigail Johnson, a Fidelity CEO, stated that "the recent implosion FTX, a cryptocurrency trading platform, has made it abundantly obvious the digital asset sector has serious problems."
US Senators Demand Fidelity Stop Offering Bitcoin Retirement Plans
Three U.S. senators wrote Monday to Fidelity Investments CEO Abigail Johnson about the firm's Bitcoin offerings in 401k retirement plans. Senators Elizabeth Warren (D.MA), Richard J. Durbin, and Tina Smith signed the letter.
The lawmakers reiterated their concerns regarding Fidelity's decision to allow bitcoin exposure in retirement plans.
They said: "Since the previous letter, digital asset industry has only become more volatile, turbulent, and chaotic — all characteristics of an asset class, no plan sponsor, or person saving for retirement should wish to go any near."
Recent collapse of FTX, a cryptocurrency trading platform, has highlighted the serious problems in the digital asset sector. There are many charismatic wunderkinds and opportunistic scamsters in the industry. Self-proclaimed investment advisors promote financial products with very little transparency.
On Nov. 11, crypto exchange FTX filed for Chapter 11 bankruptcy. The company is being investigated for allegedly mishandling customer funds.
The lawmakers warned that the "ill-advised and deceptive actions of a few" have an impact on bitcoin and other digital assets' valuations. While the full impact of FTX's damage is still being seen, it is spreading rapidly across the wider digital asset market. Bitcoin is not an exception."
Johnson was also told by the lawmakers that "in light of these risks, and continuous warning signs", Fidelity Investments should strongly reconsider its decision to permit plan sponsors to offer Bitcoin exposure to plan participants."
We are already facing a retirement security crisis by many means. This should not be made worse if retirement savings are exposed to unnecessary risk. Investment strategies that are based on the possibility of catching lightning or driven by fear of missing out are doomed to failure.
The U.S. Department of Labor was disturbed by Fidelity's decision offering bitcoin investments in 401 (k) plans. Ali Khawar, acting assistant Secretary of the Labor Department’s Employee Benefits Security Administration, stated that "We have grave concerns about what Fidelity had done." Janet Yellen, Treasury Secretary, has warned crypto is "very dangerous" and stressed that it is not suitable for most retirement savers.
Johnson received a letter from Senator Warren earlier this year asking for clarifications about the financial company's decision to permit bitcoin exposure in retirement products. A number of U.S. legislators introduced the Retirement Savings Modernization Act in September to allow workers to diversify their assets in 401(k).
What do you think of the U.S. senators asking Fidelity not to allow bitcoin investments in 401 (k) plans. Comment below.
Frequently Asked Questions
What precious metal should I invest in?
This question depends on how risky you are willing to take, and what return you want. Gold has been traditionally considered a haven investment, but it's not always the most profitable choice. For example, if your goal is to make quick money, gold may not suit you. If you have time and patience, you should consider investing in silver instead.
If you're not looking to make quick money, gold is probably your best choice. If you want to invest in long-term, steady returns, silver is a better choice.
What are the benefits of having a gold IRA?
The best way to invest money for retirement is by putting it into an Individual Retirement Account (IRA). It's tax-deferred until you withdraw it. You have complete control over how much you take out each year. There are many types and types of IRAs. Some are more suitable for students who wish to save money for college. Others are made for investors seeking higher returns. For example, Roth IRAs allow individuals to contribute after age 59 1/2 and pay taxes on any earnings at retirement. But once they start withdrawing funds, those earnings aren't taxed again. This type of account might be a good choice if your goal is to retire early.
Because you can invest money in many asset classes, a gold IRA works similarly to other IRAs. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. This makes gold IRA accounts a great choice for those who want their money to be invested, not spent.
Another benefit to owning IRA gold is the ability to withdraw automatically. This eliminates the need to constantly make deposits. To make sure you don't miss any payments, you can also set up direct deductions.
Gold is one of today's most safest investments. It is not tied to any country so its value tends stay steady. Even in times of economic turmoil gold prices tend to remain stable. It is therefore a great choice for protecting your savings against inflation.
What is the Performance of Gold as an Investment?
Gold's price fluctuates depending on the supply and demand. Interest rates can also affect the gold price.
Because of their limited supply, gold prices can fluctuate. Additionally, physical gold can be volatile because it must be stored somewhere.
- 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. (forbes.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement funds
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads and Example. Risk Metrics
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Lawful – WSJ
Gold IRAs: A Growing Trend
As investors look for ways to diversify their portfolios and protect themselves against inflation, the gold IRA trend is on the rise.
Owners of the gold IRA can use it to invest in physical bars and bullion gold. It is a tax-free investment that can be used to grow wealth and offers an alternative investment option to those who are concerned about stocks or bonds.
Investors can have confidence in their investments and avoid market volatility with a gold IRA. Investors can protect themselves from inflation and other possible problems by using the gold IRA.
Investors also enjoy the benefits of owning physical gold, which includes its unique properties such as durability, portability, and divisibility.
Additionally, the gold IRA has many benefits. It allows you to quickly transfer your gold ownership to your heirs. The IRS doesn't consider gold a commodity or currency.
Investors looking for financial security are increasingly turning to the gold IRA.
By: Kevin Helms
Title: US Senators Urge Fidelity to Stop Offering Bitcoin in 401(k) Plans Citing FTX Collapse, ‘Serious Problems’ in Crypto Industry
Sourced From: news.bitcoin.com/us-senators-urge-fidelity-to-stop-offering-bitcoin-in-401k-plans-citing-ftx-collapse-serious-problems-in-crypto-industry/
Published Date: Wed, 23 Nov 2022 00:30:51 +0000