U.S. Treasury Secretary Janet Yellen warned that crypto is a “very risky investment,” adding that she would not recommend it to most people saving for retirement. However, Yellen noted that Congress could limit the types of investments allowed in retirement accounts, including 401(k) plans.
Janet Yellen on investing in cryptocurrencies for retirement
The topic of whether Americans should be able to deposit their retirement funds in cryptocurrencies continues to be hotly debated.
U.S. Treasury Secretary Janet Yellen was asked Thursday at an event hosted by the New York Times about Fidelity’s announcement that it will allow bitcoin as an investment option for 401(k) plans.
Yellen replied.
It’s not something I would recommend to most people who are saving for retirement: …… To me, it’s a very risky investment.
Fidelity’s announcement came as the Department of Labor (DOL) issued guidance warning 401(k) plan administrators about allowing cryptocurrencies in retirement plans. Fidelity is one of the largest 401(k) plan administrators.
Ali Khawar, acting assistant secretary of the DOL’s Employee Benefits Security Administration, said the Labor Department has “serious concerns about what Fidelity has done.” He stressed that “cryptocurrencies can present a serious risk to retirement savings.”
Treasury Secretary Yellen also noted Thursday that Congress may regulate assets in retirement plans such as 401(k)s. On whether Congress should take action, Yellen clarified that.
I am not recommending it, but in my opinion it would be reasonable.
The Department of Labor’s efforts to restrict Americans from placing crypto in retirement accounts has upset some lawmakers. In response, U.S. Senator Tommy Tuberville (R-AL) introduced the Financial Freedom Act, which would prohibit the DOL from issuing “regulations or guidance that would restrict the types of investments that investors in self-directed 401(k) accounts can select through the brokerage window.” He stated. Additionally, the Department of Labor has been sued over crypto guidance.
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