| Here are the pros and cons of owning cryptocurrency in your 401(k) plan | | |  | WED, NOV 09, 2022 | | | | Does cryptocurrency have a place in your retirement savings account? It's a question more workers may need to ask themselves, as 401(k) administrators Fidelity and ForUsAll begin offering access to cryptocurrency. The firms appear to be the first to do so, writes CNBC reporter Greg Iacurci.
To be sure, your access depends not only on your plan administrator but also your employer: Companies have to decide to add this option to their lineup.
Fidelity, the largest 401(k) administrator by assets, declined to disclose how many clients have opted in. At ForUsAll, which caters to startups and small businesses, 50 clients have already added crypto as an investment option, with another 100 expected to join soon.
The moves come as the U.S. Department of Labor in March urged employers to "exercise extreme care" before giving workers exposure to cryptocurrency. The regulator cited "significant risks" for investors, such as speculation and volatility.
Both 401(k) administrators have offered some guardrails to keep investors from putting too much of their retirement savings into crypto. But it's still important to consider how those allocations compare with your personal risk tolerance, time horizon and goals. You might also gauge if your 401(k) is the best vehicle to hold your digital assets, or whether you'd be better off using a hardware wallet or cryptocurrency exchange.
Advisors recommend capping your allocation at 5% — and that's looking at all your investable assets, not just your 401(k).
For more advice to help you make smart financial decisions, check out CNBC's Financial Advisor Hub and Personal Finance section. | |
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