Crypto in Your 401(k)? Yes, It’s Possible…and It’s a Great Idea

If you had the chance to turn 5% of your retirement account into a life-changing amount of wealth…but you had to risk losing the entire 5%, what would you do? 

That’s actually not the hypothetical question it might seem to be. These days it’s a legit choice thanks to a financial services company called ForUsAll. 

The firm recently announced its new Alt401(k) plan that allows employees to allocate 5% of their account balance to as many as 50 different cryptocurrencies. It’s a first-of-its-kind setup and, damn, I wish I’d had this opportunity when I was younger and contributing to my 401(k) back in the day. 

This is exactly the kind of opportunity that changes retirement in profound ways.  

There was a period a decade or so back when you’d read these stories of secretaries and other relatively low-level employees at Microsoft, Apple, Google, and other tech firms who were sticking part of their retirement account into company stock when that company stock was worth very little. And then they retired with more money than some island nations. 

That’s the crypto opportunity today. 

A lot of people will not agree with me. That’s fine. Someone has to be wrong—that’s what makes a market. 

But those who see where the world is headed will reflexively recognize what this Alt401(k) really means. 

“The reality is that alternative asset classes, which increasingly include small allocations to cryptocurrency, have become an important part of many institutional portfolios.”  

That’s what ForUsAll wrote in its press release. The implication being that what’s good for the institutional goose, is equally good for the retail gander. 

ForUsAll is doing right by bringing crypto to the masses, even as there are loud (and oh-so-wrong) voices out there berating crypto at every turn. But at what point does Don Quixote stop tilting pointlessly at windmills? To catalog all the major companies involved with crypto these days would take up a week’s worth of columns, and I have repeated the names too many times. 

Now, we have ForUsAll seeing the wisdom of bringing crypto investing to 600,000 employees of companies including Citigroup, Coca-Cola, and Target. If crypto was such a scam/Ponzi scheme, why would federal regulators allow ForUsAll to offer such a product to American workers? 

Now, the kicker here is that most of us can’t participate in an Alt401(k) account because we’re either retired, or we’re freelancers without access to a 401(k), or we work for companies where the 401(k) provider doesn’t yet offer crypto as an investment option. 

Ahhhh—but there’s always another way. 

In this instance, we can just do it ourselves. 

Opening an account at Coinbase or Binance.US is quite easy. And it’s not terribly difficult to calculate 5% of your retirement account wealth, and then stick that sum into cryptocurrencies. 

That’s exactly what I would tell everyone to do, regardless of age. It’s 5%. That’s nothing.  

If you lose it—like, every last penny of what you invested—OK, you’ve lost 5%. That’s probably a bit less than you earn on your portfolio from dividends, capital gains, and price appreciation in one year. (By the way, you won’t lose it all. Crypto is not going to zero.) 

However, if crypto takes off as I expect, your 5% will generate unimagined gains. 

I noted recently, for instance, that my crypto portfolio is up nearly 100% in basically a month.  

Bitcoin’s coming move to six and then seven figures, and Ethereum’s coming move to five figures is going to fuel an explosion in crypto prices across the board over the remainder of this decade. So, a 5% allocation could very well become a meaningful part of a portfolio in the years ahead. It could represent a level of wealth that very well changes your path in retirement. 

I’m banking on it myself. I have about 14% of my investment portfolio in crypto, and I continually add to it when temporary selloffs give me an opportunity to buy at great prices, as happened in May and June. (Everything I bought is up more than 100% already.) 

So, I will encourage you to follow in the footsteps of ForUsAll and add crypto exposure to your retirement portfolio. Even if it’s just 5%, you’re making an investment selection that very well could push your retirement to the next level.