Senator Toomey Says Investments In Crypto Is Essential For Retirement Security

July 15, 2022 10:37 pm

Senator Toomey has publicly stated that current investment rules are preventing many Americans from having a diversified investment portfolio.

This is because the rules often create major barriers that prevent people from getting exposure to crypto and private equity.

Toomey argues that these are assets that are essential for creating financial security for retirement and that changes need to be made so that they can be included.

The rules largely restrict people with defined contribution plans such as 401(k)s which is the major way that most people save for retirement.

TheHill.com reports:

However, the current system often prevents people with defined contribution plans, such as 401(k)s, from investing in a variety of asset classes.

Toomey took the opportunity to highlight his Retirement Savings Modernization Act, which the Pennsylvania Republican said he hopes to introduce when he finds a Democratic sponsor.

He said the legislation would make it possible for more Americans to take advantage of the high returns that coincide with investing in private equity.

“For most Americans, their wealth is tied up in their home, which that’s not something you trade.

But the other big category is retirement savings, so for me this is just a really, really important part of allowing ordinary Americans to have a better life and a comfortable retirement,” Toomey, who serves on the Senate Finance Committee, said at the event.

If this bill that is being proposed is actually passed, it would allow asset mangers to expand the kinds of assets that they can invest in.

Essentially, this would unlock a large amount of capital that was previously unable to enter the cryptocurrency market and could accelerate the growth of the industry.

Unfortunately, asset managers right now are prevented from doing so as it may be violating their fiduciary obligations under the current rules.

Toomey has also clarified that he believes that it should only be a small percentage of the overall portfolio, but it would still be a huge mistake if it was not included in the portfolio at all.

In recent news, Fidelity has previously announced that they would allow exposure to Bitcoin specifically for some of their retirement plans which faced a lot of criticism from traditional finance supporters.

TheHill.com concludes:

While other asset classes, like commodities, real estate, and private equity, have been around for a long time, Toomey also called for the inclusion of one newer type of investment: cryptocurrency, a digital currency that is transferred through online networks rather than traditional institutions.

“This should only be a small slice of a retirement portfolio, but I think it would be a big mistake to exclude it.

We just don’t know where this is going, and I actually think the underlying technology is very, very powerful,” Toomey said.

The change may inevitably happen sometime in the future depending on how far this new proposed act makes it in Congress.

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