Crypto In Your 401(k)? New Rule Opens The Door, But Retirees Should Think Twice – Financial Freedom Countdown
In a sweeping reversal of prior policy, the Department of Labor (DOL) has made it easier for employers to include cryptocurrency in workplace retirement plans. The agency rescinded 2022 guidance issued under the Biden administration, which had urged employers to exercise “extreme care” before offering crypto investments in 401(k)s. The new approach, led by Trump appointees, signals a shift toward a more hands-off regulatory stance.
A New Era of “Neutral” Oversight
According to the DOL, the Biden-era warning language was out of step with the Employee Retirement Income Security Act (ERISA). The agency now states it is adopting a “neutral” position and neither encourages nor discourages crypto in retirement plans.
Decisions about whether to offer digital assets will be left to plan fiduciaries.
Why the Change? A Trump-Backed Push for Deregulation
The Trump administration has long championed the cryptocurrency industry.
Trump’s appointment of Paul Atkins, a known critic of government overreach, to head the SEC has added fuel to the deregulatory fire. Atkins has pledged to move crypto out of “SEC limbo,” suggesting more clarity and potentially fewer restrictions are on the way.
What Does This Mean for Savers?
Soon, your employer might offer Bitcoin or other digital currencies in your 401(k) investment menu. While the move is marketed as expanding choice, it also opens the door to a high-risk asset class in retirement accounts—a prospect that alarms many financial advisors.
Cryptocurrency is a Volatile Investment Choice
Bitcoin, the flagship cryptocurrency, has experienced multiple 50% crashes since its inception in 2008. Unlike stocks or bonds, crypto prices are driven more by market sentiment than underlying earnings or cash flow. This makes them highly speculative and potentially dangerous for older investors.
Younger Investors May Be More Equipped to Take the Risk
According to financial advisors, those in their 30s or early 40s may be better positioned to take calculated risks with crypto.
With crypto, you can lose it all or make tenfold. But for investors approaching retirement, even a small loss could be devastating.
For Investors Over 50, Caution Is Key
Advisors caution that crypto’s rollercoaster nature doesn’t match the needs of investors nearing retirement.
With limited time to recover from a downturn, losing even a small percentage of your nest egg could have outsized consequences. If retirement is in five or ten years, you can’t afford to lose 50% on a single day.
Simplicity of Access Can Lead to Costly Mistakes
As crypto becomes more accessible; possibly just a click away in your 401(k); some fear that investors may underestimate the risks. Advisors say, “You don’t know how Bitcoin will do long term. Someone could time it completely wrong and destroy their retirement.”
A False Sense of Security?
The inclusion of crypto in mainstream retirement plans may give investors a false impression of safety. “Just because it’s in your 401(k) doesn’t mean it’s a safe or wise investment,” advisors warns. The danger lies in mistaking availability for endorsement.
Wall Street Embraces Crypto With Caveats
Major financial firms like Fidelity, Schwab, and BlackRock are leaning into crypto, especially with the launch of spot Bitcoin ETFs. These funds make it easier to invest indirectly in crypto through traditional accounts. But even these products carry substantial risks.
How to Get Crypto Exposure in 401(k) Accounts
Although the DOL has adopted a neutral stand, plan administrators have not yet made changes to offer crypto in their 401(k) accounts.
The most likely option might be through indirect investment using ETFs that track Bitcoin or other cryptocurrencies.
Direct investment via crypto options in 401(k) menus would be an unlikely choice due to custody rules.
Both options have pros and cons, but neither removes the underlying volatility.
Regulatory Gaps Persist
Despite growing access, the crypto market remains loosely regulated. A Government Accountability Office (GAO) report noted that as of mid-2023, regulatory gaps still existed. Many crypto assets continue to trade in markets without full investor protections.
Trump’s Broader Crypto Vision
The Trump administration has proposed dramatic changes in crypto policy, including the idea of a federal “Strategic Bitcoin Reserve.” These moves suggest crypto could become more embedded in the broader U.S. financial system, including retirement planning.
Don’t Be Lured by the Hype
With crypto gaining headlines and policy support, it’s easy to get swept up in the excitement. But financial advisors urge investors—especially those nearing retirement—to stay grounded. Just because crypto investments are available doesn’t mean it’s advisable.
How Much Is Too Much?
BlackRock’s research suggests that a 1–2% allocation to Bitcoin might be reasonable in a diversified portfolio. But for retirees, even that might be too much. “If it went to zero, you probably wouldn’t be ruined,” says one advisor. “But why take that chance?”
Eyes Wide Open
Cryptocurrency in your 401(k) is no longer a fringe idea; it’s becoming a reality. But before you dive in, assess your assets, risk tolerance, time horizon, and financial goals.
For most older investors, the better move may be to watch the crypto boom from the sidelines; or dip a cautious toe, not a whole foot.
Like Financial Freedom Countdown content? Be sure to follow us!
The $1 Million ‘Starter Home’ Is Now Reality in 233 Cities. Has the American Dream Collapsed?
In 2025, the American dream of homeownership faces a stark reality. In 233 U.S. cities, even a modest starter home now costs $1 million or more. This dramatic shift, detailed in Zillow’s latest housing market analysis, underscores the growing affordability crisis confronting first-time buyers nationwide.
The $1 Million ‘Starter Home’ Is Now Reality in 233 Cities. Has the American Dream Collapsed?
During his 2024 campaign, Donald Trump pledged that seniors would no longer pay taxes on their Social Security benefits. But that promise is notably absent in the new Republican tax bill making its way through Congress. The One Big Beautiful Bill Act; named after one of President Donald Trump’s signature phrases fulfills several of his campaign pledges, including a temporary end to taxes on tips and overtime pay. However, it stops short of eliminating taxes on Social Security benefits, a key demand from many seniors. Still, the bill offers some tax relief for older Americans through other measures.
Trump’s Social Security Tax Cut Stalls Amid Senate Roadblocks
GOP Passes Trump’s Education Overhaul and Student Loan Plan as Critics Cry Foul
A sweeping Republican-backed education and tax bill, endorsed by Donald Trump and recently passed by the House, promises to overhaul the U.S. student loan system and financial aid programs. Branded by some conservatives as a long-overdue reform, critics warn the plan could upend college affordability for millions; especially low-income families, graduate students, and current borrowers. We break down what the bill includes; and what it could mean for students, parents, and universities.
GOP Passes Trump’s Education Overhaul and Student Loan Plan as Critics Cry Foul
Trump-Branded ‘MAGA Accounts’ Spark Political Fight But Financial Experts Say Stick With 529s for Your Kids
Tucked inside the Republican Party’s sweeping “one big beautiful bill,” which cleared the House early Thursday, is a pilot program to launch new tax-advantaged investment accounts for newborns. Each child born during a second Trump term would automatically receive a $1,000 government-funded deposit. Initially dubbed “MAGA accounts”; short for “Money Account for Growth and Advancement”, the name was a not-so-subtle nod to Trump’s iconic slogan. But in a last-minute amendment, House Republicans took it one step further, voting to officially brand the accounts with the president’s name.
Retirement Dreams on Hold as 73% of the Sandwich Generation Support Parents and Adult Kids, Survey Finds
If you’ve ever flown on a plane, you know the drill: “Put your own oxygen mask on first before assisting others.” It’s easy advice to hear, but much harder to live by — especially if you’re caring for aging parents and supporting children. Welcome to life in the sandwich generation. Many people in their 40s and 50s face this dual responsibility right when their own retirement savings should be hitting full speed. A new survey conducted by Athene of the Sandwich Generation, found that nearly three quarters (73%) of respondents have adjusted their retirement goals to support their adult children or aging relatives, including: – Delaying retirement (34%) – Using retirement assets to support their family (22%) – Not planning to retire at all (9%) If you’re feeling squeezed from both sides, you’re not alone. Here’s what you need to know to survive and thrive during this overwhelming phase of life.
Did you find this article helpful? We’d love to hear your thoughts! Leave a comment with the box on the left-hand side of the screen and share your thoughts.
Also, do you want to stay up-to-date on our latest content?
1. Follow us by clicking the [+ Follow] button above,
2. Give the article a Thumbs Up on the top-left side of the screen.
3. And lastly, if you think this information would benefit your friends and family, don’t hesitate to share it with them!
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
Here are his recommended tools
Personal Capital: This is a free tool John uses to track his net worth on a regular basis and as a retirement planner. It also alerts him wrt hidden fees and has a budget tracker included.
Platforms like Yieldstreet provide investment options in art, legal, real estate, structured notes, venture capital, etc. They also have fixed-income portfolios spread across multiple asset classes with a single investment with low minimums of $10,000.
