Go beyond a basic 401(k)

Go beyond a basic 401(k)

Give your employees more than just a 401(k), join the movement.

Blog
5 min read

Does cryptocurrency check the right boxes for your 401(k)?

David Ramirez
August 26, 2021
Does cryptocurrency check the right boxes for your 401(k)?
Table of contents

A recent innovation allows businesses to include access to digital currencies (cryptocurrency) in their 401(k), but how do you know if it’s the right thing to do? Those already investing in cryptocurrency may grasp the potential for tax savings by doing it in a 401(k), but many plan sponsors are asking themselves if it really makes sense.

Five key questions to ask when considering cryptocurrency in your 401(k):

1.   Does it actually make sense for retirement portfolios?

A recent study from Yale University has shown that cryptocurrency has a very low correlation with stocks and bonds, and that a small allocation, between 0% and 5%, can lead to higher expected growth when combined with a well-diversified portfolio. This may be why 60% of institutional investors say that cryptocurrency has a role to play in their portfolios and some large institutional investors — including Yale, Brown, and Harvard — include it in their portfolios. ForUsAll’s Alt401(k) provides education, guidance, and guardrails to help employees navigate digital investments.


2.   Would employees be interested in it?

Around 14% of US adults are currently invested in cryptocurrency, nearly half of all millennials already own some, and nearly 2/3 are “crypto curious.” So, including cryptocurrency in your 401(k) plan may increase participation and savings.


3.   Does it require extra oversight by the plan sponsor?

With the Alt401(k), ForUsAll takes on the fiduciary role of selecting and monitoring the cryptocurrency window provider so that plan sponsors don’t have additional oversight responsibilities. Talk to us to learn more about the fiduciary role that ForUsAll plays.


4.   Is it easy to add cryptocurrency to a 401(k) plan?

Providing access is easy with the Alt401(k)'s Self-Directed Digital Currency Window. Employees make contributions to cryptocurrency from their paycheck, just as with the mutual funds in the 401(k). They can easily transfer part of their existing 401(k) balance to cryptocurrency, or from their cryptocurrency investments back to mutual funds, whenever they choose.


5.   Are there other benefits of cryptocurrency in a 401(k)?

Yes, and they include:

Lower taxes: Buy, hold, and sell cryptocurrency tax-free in a 401(k). With after-tax contributions, all investment gains are tax-free — FOREVER (1).

Added convenience: No separate account, no wallet, no keys.

Greater security: Assets are held offline in cold storage, so they’re safe from hackers.

Simple, convenient, and secure access to cryptocurrency investments

ForUsAll’s Alt401(k) can give your employees simple, convenient, and secure access to cryptocurrency investments, along with traditional mutual funds, and environmentally responsible funds. Our low-cost turnkey plan was built for small- and medium-size businesses. We automate the administrative work, your employees get options they will actually want to invest in, and you get a team of retirement experts customizing a plan for your business.

Let’s talk – see what your retirement plan could do for your employees.

(1) ForUsAll does not provide tax advice and the tax laws could change in the future. To be fully tax exempt and subject to withdrawal without penalty, you must meet the 5 year rule for the initial Roth deferral and you must be at least 59 1/2 years old. Consult your retirement plan provider or your accountant for details.

Go beyond a basic 401(k)
Give your employees more than just a 401(k), join the movement.
David Ramirez
About Author -
David Ramirez

David Ramirez, CFA, is a recognized 401(k) expert with over 20 years of experience in 401(k), ERISA, cash balance plans, and ESOPs. A UC Berkeley graduate, he played a pivotal role at Financial Engines, a 401(k) advisory firm founded by Nobel Laureate William Sharpe, Ph.D., where he was a portfolio manager who helped manage over $50B in 401(k) assets.  His clients included some of the largest Fortune 500 companies and state governments.

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This material has been prepared for informational and educational purposes only and should not be construed as a recommendation by ForUsAll, Inc., its affiliates or employees (collectively, “ForUsAll”)  to activate a cryptocurrency window or invest in crypto.  Investing in crypto can be risky and investors must be able to afford to lose their entire investment.  You should consult with your own advisers before activating a cryptocurrency window or investing in crypto.  ForUsAll does not provide legal, tax, or accounting advice. Please refer to your Plan's fee disclosure for more details.© 2023 ForUsAll, Inc. All rights reserved.
1 Schwab 2022 401(k) Participant Study - Gen Z/Millenial Focus, October 2022.
2 As of 12/31/2022. Employees include both current employees and terminated participants with a balance.
3 "Morgan Stanley At Work: The Value of a Financial Advisor" Morgan Stanley, March 2022.
4 Sarah Britton was a client when she provided this testimonial through an independent third party review website. She received no compensation for her remarks. There are no known conflicts of interest in the provision of her comments related to the services provided.