Could Cryptocurrency Be Coming to Retirement Plans?

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WSJ Your Money Briefing 9 min 3 speakers 2 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

ReliaQuest Advertiser 0:00
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J.R. Whalen 0:30
Here's your money briefing for Thursday, June 10th. I'm J.R. Whelan for The Wall Street Journal. When saving for retirement, most people choose a balance of stocks, ETFs, and funds offered by their 401k or IRA administrator. But what typically is not on the list of investment options is something as risky and unpredictable as cryptocurrency.
Anne Tergesen 0:55
It's not common at all. I mean, the brokerage platforms that most people use for their IRAs, companies like Fidelity and Schwab, they don't allow people to invest directly in cryptocurrencies.
J.R. Whalen 1:07
But could that be about to change? Coming up, our retirement reporter Ann Turgason will tell us about one 401k provider that's offering access to crypto and the potential benefits and risks of adding it to your retirement fund. That's after the break.
ReliaQuest Advertiser 1:20
This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.

What announcement kicked off the episode about crypto in retirement plans?

J.R. Whalen 1:58
The 401k provider known as For Us All handles just a small fraction of the $22 trillion retirement account market, but it's taking a big leap into the world of cryptocurrency. It's teaming up with crypto exchange Coinbase to allow customers to add crypto to their retirement accounts. Our retirement reporter Anne Turgenson is here with the details. Anne, nice to have you with us.
Anne Tergesen 2:19
Thanks for having me.
J.R. Whalen 2:20
So Anne, this decision by For Us All is pretty unusual. What can you tell us about how it'll work?
Anne Tergesen 2:25
So for us all is a 401k provider. It tends to specialize in smaller companies, often like, you know, startup companies. It's located in California. They currently have about $1.7 billion in assets that they are administering within 401k plans so it's not a big player it's not you know nearly on the scale of say a fidelity or a vanguard where you know it's built they have billions of dollars in 401k plans so they're a small player and i think they're trying to differentiate themselves with this offering and um the way it's going to work the way that they they have offered it is that If your employer uses For Us All as a 401k provider, the employer can decide whether to offer the cryptocurrency offering.
Anne Tergesen 3:12
And so if the employer makes the decision to do that, the employee will have the option to invest up to 5% of assets in cryptocurrency.
J.R. Whalen 3:22
And just to clarify, will this be an investment in a fund that holds cryptocurrency or investing directly in the currency itself?
Anne Tergesen 3:28
It's investing directly in cryptocurrency. And so the idea, the goal is that it would ideally cap at 5% a participant's exposure to cryptocurrency. Now, Forrestal says that once the value of the cryptocurrency offerings within an investor's portfolio exceeds 5% of the balance, company will notify the employee to ideally to sell some cryptocurrency and what they call rebalance by you know limiting capping their exposure at five percent in reality it would be up to the employee to make the decision about whether to do that or to whether whether to allow cryptocurrency to continue to accrue in their account at a higher percentage of the balance
J.R. Whalen 4:13
Got it. Now, you've spoken with managers of small businesses that offer retirement accounts from For Us All.

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