Will You Be Able to Add Bitcoin to Your 401(k)?

Will you be able to add Bitcoin to your 401(k)

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Will you be able to add crypto to your 401(k)?

The short answer: Yes, but it's not easy.

Fidelity will make it possible to add Bitcoin to 401(k) accounts, but this doesn’t mean that every employee whose plan is overseen by the company will be able to do so. That’s because 401(k) accounts are ultimately the responsibility of employers, who have a fiduciary responsibility to their employees.

At the moment, most analysts predict that most companies won’t allow their employers to add Bitcoin; at least not right away. Though Bitcoin might be suitable for some employees, it’s unlikely to be a responsible investment for those close to retirement—and because of the way that most employers administer 401(k) plans, the same investment options must be open to all plan participants.

You know your retirement plan has a lot of options to choose from, but did you know that cryptocurrency is one of them?

If you’re not sure how to get started, we’ve got the answers for you.

We all know that 401(k)s are important for our future financial security, but not everyone knows how to manage their investments. That’s why it’s important to start early and make smart decisions about what kinds of investments are right for your needs.

So what kind of options are out there? Well, if you have a traditional 401(k) plan through work, then there may be some limited investment choices available in the form of mutual funds or index funds—but they probably won’t include cryptocurrencies like Bitcoin or Ethereum.

These concerns have recently been echoed by the Department of Labor. Though the federal agency hasn’t gone as far as banning crypto from retirement plans, it issued a compliance assistance document in March 2022 that reminded plan overseers—that is, employers who must act solely in the best interest of participating workers—that they were responsible for choosing “prudent” options. And it strongly suggested that cryptocurrencies didn’t yet appear to meet that bar.

While you can't add crypto to your 401(k) account at the moment, it looks like things are about to change. Fidelity became the first company to offer investors the chance to add crypto assets to their 401(k) retirement accounts later in the year — as long as their employers allow it.

That means that if you work for an employer that offers Fidelity's 401(k) services, you may be able to invest in Bitcoin and other cryptocurrencies while saving for retirement. However, your employer will have the final say as to whether or not they will allow this option.

At the moment, it looks like few employers will offer this option due to the speculative nature of crypto investments.

Should I Add Crypto to My 401(k) Account?

Though Bitcoin, the most well-established cryptocurrency, has made spectacular gains in the past decade, most analysts think that it is simply too volatile to make for a responsible retirement investment.

This is our disclosure:  This summary is for informational purposes only. This summary is not intended to be a recommendation for or give advice for any company or individual.

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Nicole Jolie

Nicole Jolie brings you updated information on retirement including where to travel, health, investment trends and planning.  Whether you're a GenX'er, Baby Boomer or about to retire this site is for you.


This is our disclosure:  This summary is for informational purposes only. This summary is not intended to be a recommendation for or give advice for any company or individual.

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