Numerous U.S. senators called for Fidelity Investments' reconsideration of allowing bitcoin to be included in 401(k), retirement plans. Abigail Johnson, a Fidelity CEO, stated that "the recent implosion FTX, a cryptocurrency trading platform, has made it abundantly obvious the digital asset sector has serious problems."
US Senators Demand Fidelity Stop Offering Bitcoin Retirement Plans
Three U.S. senators wrote Monday to Fidelity Investments CEO Abigail Johnson about the firm's Bitcoin offerings in 401k retirement plans. Senators Elizabeth Warren (D.MA), Richard J. Durbin, and Tina Smith signed the letter.
The lawmakers reiterated their concerns regarding Fidelity's decision to allow bitcoin exposure in retirement plans.
They said: "Since the previous letter, digital asset industry has only become more volatile, turbulent, and chaotic — all characteristics of an asset class, no plan sponsor, or person saving for retirement should wish to go any near."
Recent collapse of FTX, a cryptocurrency trading platform, has highlighted the serious problems in the digital asset sector. There are many charismatic wunderkinds and opportunistic scamsters in the industry. Self-proclaimed investment advisors promote financial products with very little transparency.
On Nov. 11, crypto exchange FTX filed for Chapter 11 bankruptcy. The company is being investigated for allegedly mishandling customer funds.
The lawmakers warned that the "ill-advised and deceptive actions of a few" have an impact on bitcoin and other digital assets' valuations. While the full impact of FTX's damage is still being seen, it is spreading rapidly across the wider digital asset market. Bitcoin is not an exception."
Johnson was also told by the lawmakers that "In light of this risks and constant warning signs, Fidelity Investments is urged to again strongly urge plan sponsors and plan participant to do what is best — seriously reconsider its decision not to allow plan sponsor to offer bitcoin exposure for plan participants."
We are already facing a retirement security crisis by many means. This should not be made worse if retirement savings are exposed to unnecessary risk. Investment strategies that are based on the possibility of catching lightning or driven by fear of missing out are doomed to failure.
The U.S. Department of Labor was disturbed by Fidelity's decision offering bitcoin investments in 401 (k) plans. Ali Khawar, acting assistant Secretary of the Labor Department’s Employee Benefits Security Administration, stated that "we have grave concerns about what Fidelity had done." Janet Yellen, Treasury Secretary, has warned crypto is "very dangerous" and stressed that it is not suitable for most retirement savers.
Johnson received a letter from Senator Warren earlier this year asking for clarifications about the financial company's decision to permit bitcoin exposure in retirement products. A number of U.S. legislators introduced the Retirement Savings Modernization Act in September to allow workers to diversify their assets in 401(k).
What do you think of the U.S. senators asking Fidelity not to allow bitcoin investments in 401 (k) plans. Comment below.
Frequently Asked Questions
How much are gold IRA fees?
An Individual Retirement Account (IRA) fee is $6 per month. This fee includes account maintenance fees as well as any investment costs related to your selected investments.
Diversifying your portfolio may require you to pay additional fees. These fees vary depending on what type of IRA you choose. Some companies offer free checking, but charge monthly fees for IRAs.
A majority of providers also charge annual administration fees. These fees range between 0% and 1 percent. The average rate is.25% each year. These rates can often be waived if a broker, such as TD Ameritrade, is involved.
What is a Precious Metal IRA and How Can You Benefit From It?
A precious metal IRA lets you diversify your retirement savings to include gold, silver, palladium, rhodium, iridium, osmium, osmium, rhodium, iridium and other rare metallics. These metals are known as “precious” because they are rare and extremely valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.
An IRA for precious metals allows you to directly invest in bullion instead of purchasing stock shares. You'll get dividends each year.
Precious Metal IRAs don’t require paperwork nor have annual fees. Instead, you only pay a small percentage on your gains. You can also access your funds whenever it suits you.
How much of your portfolio should be in precious metals?
To answer this question we need to first define precious metals. Precious metals refer to elements with a very high value relative other commodities. This makes them very valuable in terms of trading and investment. The most traded precious metal is gold.
There are however many other types, including silver, and platinum. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It is also relatively unaffected both by inflation and deflation.
The general trend is for precious metals to increase in price with the overall market. However, they may not always move in synchrony with each other. The price of gold tends to rise when the economy is not doing well, but the prices of the other precious metals tends downwards. This is because investors expect lower interest rates, making bonds less attractive investments.
The opposite effect happens when the economy is strong. Investors want safe assets such Treasury Bonds and are less inclined to demand precious metals. They are more rare, so they become more expensive and less valuable.
To maximize your profits when investing in precious metals, diversify across different precious metals. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
How is gold taxed by Roth IRA?
The tax on an investment account is based on its current value, not what you originally paid. So if you invest $1,000 in a mutual fund or stock and then sell it later, any gains are subject to taxes.
You don't pay tax if you have the money in a traditional IRA/401k. Taxes are only charged on capital gains or dividends earned, which only apply to investments longer than one calendar year.
Each state has its own rules regarding these accounts. Maryland requires that you withdraw funds within 60 business days after reaching the age of 59 1/2. Massachusetts allows you up to April 1st. And in New York, you have until age 70 1/2 . To avoid penalties, you should plan ahead and take distributions as soon as possible.
Can the government take your gold
You own your gold and therefore the government cannot seize it. It's yours, and you earned it by working hard. It belongs entirely to you. There may be exceptions to this rule. Your gold could be taken away if your crime was fraud against federal government. You can also lose precious metals if you owe taxes. However, if you do not pay your taxes, you can still keep your gold even though it is considered property of the United States Government.
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Fraud Advisory: Precious Metals Fraud
By: Kevin Helms
Title: US Senators Urge Fidelity to Stop Offering Bitcoin in 401(k) Plans Citing FTX Collapse, ‘Serious Problems’ in Crypto Industry
Sourced From: news.bitcoin.com/us-senators-urge-fidelity-to-stop-offering-bitcoin-in-401k-plans-citing-ftx-collapse-serious-problems-in-crypto-industry/
Published Date: Wed, 23 Nov 2022 00:30:51 +0000