One 401(k) plan administrator aims to woo millennials into retirement planning by including cryptocurrency as an investable asset class.
“Our hope is that by making cryptocurrency available, not only can we help improve portfolio expected return in risk, but more importantly, we can make the 401(k) more engaging and relevant in this modern era,” David Ramirez, co-founder and chief investment officer of ForUsAll, recently shared with Yahoo Finance Live (video above).
Starting in July, ForUsAll will allow savers with plans its administers to allocate 5% of their contributions to the leading cryptocurrencies through Coinbase.
The provider is shaking up the traditional 401(k) asset classes with the inclusion of crypto in a bid to appeal to the nearly 1 in 2 millennials who already invest in the digital currency, but might not have much interest in retirement saving and planning. The allure isn't limited to millennials as two-thirds of Americans are also interested in investing in cryptocurrency.
ForUsAll isn't blind to crypto’s notorious volatility — bitcoin lost 30% of its value in a week last month, for example. That's why the provider is only allowing 5% to be invested in crypto and is permitting savers to invest in just 50 cryptocurrencies — even though more than 4,000 exist, Ramirez explained. For transparency, investors also must acknowledge reading disclosures explaining crypto’s volatility.
Read more: Bitcoin: 74 questions answered
“One of the roles that we play as an advisor is to review what's available in the Coinbase platform,” Ramirez said, even if it means excluding white-hot cryptos like dogecoin since ForUsAll has deemed it out of bounds for a portfolio.
Still in its rollout phase, Ramirez remarked that the demand “both from plan sponsors of 401(k) plans and the employees themselves” proves that the American appetite for crypto is strong.