Schwab study says nearly half of younger people want exposure to cryptocurrency in their 401(k) seconds

Schwab study says nearly half of younger people want exposure to cryptocurrency in their 401(k) seconds

  • 46% and 45% of Generation Z and Millennials, respectively, said they would like to be able to invest in cryptocurrency via their 401(k)s
  • Outside of a 401(k), 25% of respondents said they invest in cryptocurrencies as a way to save or invest in retirement

Young people, at least in the United States, are leaning less on traditional 401(k)s to save for retirement — and they increasingly prefer new options like crypto, according to a new study by Charles Schwab.

The study It found that 37% of Gen Z workers and 54% of millennials say their first investment experience was through a 401(k) — less than 61% for both Gen X and Baby boomers.

Instead, the two younger tranches are more likely to invest in cryptocurrencies, real estate, pensions, and small businesses than their older counterparts. The study found that nearly 22% of Generation Z workers have made their first-time investment through mobile trading, while 11% have invested for the first time in cryptocurrencies.

An online survey, conducted by Logica Research for Schwab Retirement Plan Services, in April, included 1,000 participants in the US 401(k) plan.

Young people are questioning traditional ways of working and retiring as they have changed jobs and reconsidered priorities during the pandemic, Catherine Goldaypresident of Schwab Workplace Financial Services, in a statement.

“The 401(k), while still their primary retirement savings tool, is no longer seen as their only path to retirement,” Golladay said. “They see an opportunity to achieve their financial goals through diversified assets that keep them motivated to invest and participate in their financial future.”

32 percent of respondents said they would like to be able to invest in cryptocurrency via their 401(k) — with 46% and 45% of millennials and millennials, respectively, reporting this preference.

Fidelity Investments said in April It is set to allow individuals to allocate a portion of their retirement savings to Bitcoin through the company’s internal 401(k) plans. A Blockworks spokesperson said last week that the company digital asset account She was on her way to launching the first clients of her plan sponsors this fall.

A spokesman for Charles Squab declined to comment on whether they would seek to launch a similar offer.

Crypto payroll solutions company Bitwage partnered with 401(k) provider ForUsAll earlier this month to allow crypto to 401(k) on a tax or post-tax basis. Jonathan Chester, CEO of Bitwage, told Blockworks that he expects younger workers who do not generally use a 401(k) to seek exposure to cryptocurrency via retirement accounts for tax savings.

“[That could] “Bring more people within our Millennium and Generation Z groups into the fold perhaps to use these systems in unique ways,” Chester said. “It would be very difficult to do this with a 401(k), because the employer has a fiduciary liability, so I imagine independent retirement accounts [IRAs] He will lead the way.”

Outside of 401(k)s, 61% of those surveyed said they use a savings account to save or invest for retirement, while 25% said they invest in cryptocurrencies. Millennials were 35% more likely to invest in cryptocurrency, while only 4% of baby boomers did.

39 percent reported savings in a Health Savings Account (HSA), while 33% and 29%, respectively, said they invest in an IRA or brokerage account.

The study comes during a year when Charles Schwab and other large financial services firms became more involved in cryptocurrency.

Charles Schwab brings to market the first ETF linked to cryptocurrency In August after a similar launch by competitors Black stone And the devotion.

Schwab was also among a group of companies, including Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial, To support the crypto exchange EDX Markets Last month.


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  • Ben Struck

    Ben Struck is a Denver-based reporter who covers macro and native crypto funds, financial advisors, structured products, and integrating digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry at Fund Intelligence and was a reporter and editor for several local Long Island newspapers. Graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]

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