Digital Assets are Encouraging Younger Employees to Start Saving for Retirement
Sandy, UT -- (ReleaseWire) -- 05/02/2022 --401GO, a fintech startup that provides small businesses with the opportunity to offer employees a 401(k) plan, discusses the pros and cons of investing in cryptocurrency and other digital assets within a retirement plan. 401GO's substantial expertise, along with their technological flexibility, enable them to offer investing options that participants want while encouraging wise and proven strategies.
In recent years, cryptocurrencies have become popular, in part due to the secure nature of the transactions. Using blockchain technology, a tamper-resistant record of transactions is made to ensure ownership, and to prevent the copying of holdings or the ability to spend money twice. But because they are a new technology, the consequences of using cryptocurrency may not be known for some time.
"There seems to be a lot of debate on the soundness of crypto investments which can only be fully answered years down the road with the benefit of hindsight," said Dan Beck, CEO of 401GO. However, for younger investors, waiting has its own consequences.
"We choose to focus more on the demand for this investment and its effect on participation rates," Beck continued. "We have discovered the inclusion of bitcoin or crypto related investments to be a compelling way to enhance participation in 401(k)s. For example, participation rates among younger workers are generally only around 20%. This same demographic also tends to be far more interested in crypto assets and the inclusion of those investments in a 401(k) does enhance participation for these workers. While we don't currently offer direct investment into any crypto assets, we do have the ability for participants to invest in a crypto based mutual fund if their 401(k) advisor or employer wants to allow it."
With some providers beginning to offer digital asset investments within retirement accounts, many investors are becoming excited about this new opportunity, but financial advisors warn that the unknowns could cause financial vulnerability. Because cryptocurrencies are notoriously volatile with unproven rates of return, and because many are expected to fold in coming years, investors can be taking a big gamble when they add crypto to their portfolios.
Saad Zariff, Head of Growth at 401GO commented, "Digital assets have a strong presence in the market now and it's important for investors and advisors to educate themselves about this asset class in order to make best investment decisions." Zariff warns against following the trends and encourages participants not to invest more in crypto than they are willing to lose. "I recommend investors take time to learn how to take advantage of cryptocurrency without putting themselves at substantial risk."
401GO offers affordable and easy to manage 401(k) plans to small businesses. Their automated platform offers participants a robust list of investment options, and if the employer agrees, a list of over 6,000 unique funds are available, allowing them to invest in a diverse group of mutual funds and ETFs, including the BITQ Crypto ETF. To help educated employers, participants, and advisors, 401GO will be hosting a live educational webinar on Thursday, May 5.