A recent survey conducted by United States asset manager Charles Schwab revealed that almost half of Gen Z and Millennials in the United States who were included in the survey desire some form of crypto assets to be in their 401(k) retirement plans.
The company’s survey found that 46% of Gen Z and 45% of Millennials wish that they would be able to make investments in cryptocurrencies to be used when they retire.
Participants were polled to see what they wanted to have added to their 401(k) retirement products.
The survey also discovered that 43% of Gen Z and 47% of Millennials have already started to invest in cryptocurrencies outside their 401(k), indicating the respondents’ affinity for the asset class.
The survey comprised 1,100 401(k) retirement plan respondents aged 21 to 70 for a 10-minute survey. Respondents also had to have worked for a firm with 25 or more employees and be current 401(k) plan participants.
Millennials are those born between the early 1980s and the mid-1990s, while Gen Z is those born between the mid to late 1990s and the early 2010s.
The findings contrast sharply with Gen X and Boomers (those born between the mid-1940s and late 1970s) who were surveyed — with only 31% and 11%, respectively, desiring to invest in cryptocurrencies through their 401(k), and even fewer of them are currently invested in the crypto asset.
However, a vast majority of the respondents viewed inflation as the most significant barrier to retirement.
But, a similar study conducted by Investopedia in April found that only 28% of US-based Millennials and 17% of Gen Z respondents anticipated investing in cryptocurrency as a part of their retirement funds.
Although crypto-based retirement funds have been in the works since February 2019, the asset manager presently does not offer any cryptocurrency investments as part of its 401(k) retirement plans.
Fidelity Investments reportedly put plans in place in April to allow Bitcoin investment for ts 401(k) retirement saving account holders, with savers permitted to allocate up to 20% of Bitcoin to their savings portfolio.
In November 2021, Rest Super became the first retirement fund in Australia to offer cryptocurrency allocation as part of a diversified portfolio to its 1.9 million members.
While most digital asset retirement funds are available in the form of Bitcoin or Ether, a North Virginian county proposed in May 2022 to place a part of retirees’ pension funds into a decentralized finance (DeFi) yield farming account, which was later approved in August 2022.
However, things can go wrong. A Quebec pension fund lost nearly all of its $154.7 million investment in the now-defunct cryptocurrency lending platform Celsius.
Controversies like this have divided US Senators on the gravity of the risks associated with crypto-exposed 401(k) retirement plans.
Among them are Democratic Senators Elizabeth Warren, Dick Durbin, and Tina Smith, who have repeatedly claimed that exposing Americans’ “hard-earned” retirement funds to “cryptocurrency casinos” is a “bridge too far.”