Posted on Jun 15, 2022

Would you include Crypto in your 401K plan?

Are you investing in Cryptocurrency, such as Bitcoin or Ethereum?

People seem to either love it or hate it. Well, whether you love it or hate it, pretty soon you might be able to include cryptocurrency in your 401(k) investments.

A new bill is being introduced in the House called the "Financial Freedom Act" that will allow cryptocurrency to be part of your 401(k) retirement plan.

There are already some financial companies that will allow you to include cryptocurrency, like Bitcoin, in your IRA. For example, iTrust Capital Inc. will allow you to open an IRA and invest in cryptocurrency right now. But until now, there has not been a big push to allow crypto in a 401(k) plan. All retirement plans are government regulated, but for some bureaucratic (and ridiculous) reason, the is more of a governmental push for control over 401(k)s.

Is Crypto a risky investment?

Our own Senator Elizabeth Warren, of Massachusetts, expressed concern about allowing crypto in a 401(k), stating that crypto is a "risky and speculative gamble". While I don't necessarily think she's wrong, when it comes to the risk of investing in cryptocurrency, and that it's highly volatile, I do think that it's a matter of choice about whether we want to assume that risk in our investments and retirement funds.

Fidelity Investments seems to share this view. About a month ago, Fidelity Investments announced that it plans to offer Bitcoin as an investment option in its 401(k) and will start offering Bitcoin as an investment option in the middle of 2022. This alarmed many lawmakers, according to an article from Fox, and they were concerned that the company would be exposing their clients to a very risky and unstable investment choice. The Labor Department immediately warned Fidelity that offering crypto investments could subject them to additional scrutiny and investigation. In other words, they were urging Fidelity not to make this offering.

Fidelity has rejected the guidance from the Labor Department, and in my opinion, they are right to do so. They argue that their customers are adults and have the right to pick and choose how the money is to be invested. Further, they can still fulfill their fiduciary duties to their clients even while allowing crypto investments. See the letter from Fidelity to the Labor Department, HERE. The proposal by Fidelity is to allow clients to put up to 20% of their 401(k) savings into Bitcoin, with the plan of offering other cryptocurrencies later.

 Bitcoin is simply an option for investors, not a requirement.

I am in complete agreement with Fidelity's plan. Regardless of how you feel about cryptocurrency, and even if you want nothing to do with investing in cryptocurrency, you would not be forced to do so. The cryptocurrency investment in the 401(k) is simply one of many investment choices. People can choose whether or not they want to exercise that option. In other words, responsible adults that have earned their paycheck should have the right to choose how their retirement funds are invested. If they want to include cryptocurrency in their 401(k) investments, they should have the right to do so. At the same time. If a person does not want cryptocurrency included as part of their retirement investments, they have the right to decline any crypto investments and choose more traditional investment vehicles like stock and mutual funds.

I am very much in favor of choice here. While I am a fan of cryptocurrency and I am experienced with the unique estate planning challenges that cryptocurrency creates, I do feel that it is a valid investment choice and that individuals should have the right to determine whether or not they want to include it in their portfolios. People that are interested in crypto should have the right to decide how their retirement money should be invested. Younger people also have the benefit of time, so they can choose to invest in a more volatile asset because they have time before they retire, during which the assets can recover or they can change investments.

I don't want anyone telling me what I can and cannot invest my own money in, regardless of whether it's a brokerage account or a retirement account. The choice of how to spend my own money belongs to me. And I think that should be true for all Americans.

If you want to protect your crypto, set up a Strategic Planning Session with one of our attorneys! You can call our office at 978-487-5219 or book online at

You can read more about the new Republican bill and Crypto investments here.

Michael Monteforte, Jr.
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