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
The U.S. Senate Committee on Banking, Housing, and Urban Affairs announced that Representative Peter Meijer (R.MI) and Senator Tim Scott (R.SC) 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 prudence a fiduciary's decisions to expose a plan's participants in cryptocurrencies, and other products whose value are tied to cryptocurrency," 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
What is the best precious-metal to invest?
This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. While gold is considered a safe investment option, it can also be a risky choice. Gold may not be right for you if you want quick profits. If you have the patience to wait, then you might consider investing in silver.
If you don’t want to be rich fast, gold might be the right choice. If you want to invest in long-term, steady returns, silver is a better choice.
How much gold should you have in your portfolio?
The amount of capital required will affect the amount you make. You can start small by investing $5k-10k. As you grow, you can move into an office and rent out desks. This will allow you to pay rent monthly, and not worry about it all at once. Rent is only paid per month.
You also need to consider what type of business you will run. In my case, I am running a website creation company, so we charge clients around $1000-2000/month depending on what they order. You should also consider the expected income from each client when you do this type of thing.
Because freelance work pays freelancers, you won't likely get a monthly income if you do freelance work. Therefore, you might only get paid one time every six months.
You must first decide what kind and amount of income you are looking to generate before you can calculate how much gold will be needed.
I recommend starting with $1k to $2k of gold, and then growing from there.
Is buying gold a good option for retirement planning?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
Physical bullion bar is the best way to invest in precious metals. You can also invest in gold in other ways. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. Owning gold stocks should work well if you need cash flow from your investment.
You can also invest your money in exchange-traded fund (ETFs), which give you exposure to the gold price by holding securities related to gold. These ETFs can include stocks of precious metals refiners and gold miners.
Statistics
- 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)
- 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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
External Links
bbb.org
law.cornell.edu
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement accounts
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Do you want to keep your IRA gold at home? It's Not Exactly Legal – WSJ
How To
Tips for Investing In Gold
Investing in Gold remains one of the most preferred investment strategies. There are many benefits to investing in gold. There are many ways you can invest in gold. There are many ways to invest in gold. Some prefer buying physical gold coins while others prefer gold ETFs (Exchange Traded Funds).
Before you buy any type of gold, there are some things that you should think about.
- First, you must check whether your country allows you to own gold. If it is, you can move on. Or, you might consider buying gold overseas.
- The second is to decide which kind of gold coin it is you want. You can choose between yellow gold and white gold as well as rose gold.
- Thirdly, it is important to take into account the gold price. Start small and move up. It is important to diversify your portfolio whenever you purchase gold. Diversify your investments in stocks, bonds or real estate.
- Last but not least, remember that gold prices fluctuate frequently. Be aware of the current trends.
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By: Kevin Helms
Title: US Lawmakers Introduce Bill Allowing Crypto Investments in 401(k) Retirement Plans
Sourced From: news.bitcoin.com/us-lawmakers-introduce-bill-allowing-crypto-investments-in-401k-retirement-plans/
Published Date: Sat, 01 Oct 2022 02:30:10 +0000
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