US Treasury Secretary Janet Yellen warns that crypto is a “very risky investment”, adding that she wouldn’t recommend it to most people saving for retirement. However, Yellen noted that Congress could restrict the type of investments allowed in retirement accounts, including 401(k) plans.
Janet Yellen on investing in cryptocurrencies for retirement
Whether Americans should be able to put their retirement savings in cryptocurrencies continues to be hotly debated.
US Treasury Secretary Janet Yellen was asked at a New York Times event on Thursday about Fidelity’s announcement to allow bitcoin as an investment option in 401(k) plans.
It’s not something I would recommend to most people saving for retirement… For me, it’s a very risky investment.
Fidelity’s announcement follows a directive issued by the Department of Labor (DOL) warning administrators of 401(k) plans to allow cryptocurrencies in pension plans. Fidelity is one of the largest administrators of 401(k) plans.
Ali Khawar, acting assistant secretary of the DOL Benefits Security Administration, said the Labor Department was “seriously concerned about what Fidelity has done.” He pointed out that “cryptocurrencies can pose serious risks to retirement savings.”
Treasury Secretary Yellen also noted Thursday that Congress could regulate assets that can be included in retirement plans like 401(k). Commenting on whether Congress should act, Yellen said:
I’m not saying I recommend it, but it would be a reasonable thing in my opinion.
Efforts by the Labor Department to stop Americans putting crypto into retirement accounts have upset some lawmakers. In response, U.S. Senator Tommy Tuberville (R-AL) introduced the Financial Freedom Act to prohibit the DOL “from issuing regulations or guidelines that limit the type of investments that self-directed investors of a 401(k) ) can choose through a brokerage window.” Additionally, the Department of Labor has been sued for its crypto advice.
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