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(Kailey Hagen)
If you had invested $ 1,000 in Bitcoin (CRYPTO: BTC) in 2010, you would probably already be retired – and be living a pretty extravagant lifestyle. And with some crypto bulls claiming that the price of the original cryptocurrency could one day exceed $ 100,000 per token, it’s understandable that many people are wondering if Bitcoin could help fund their pensions as well.
Anything is possible, but if you are hoping to use your 401 (k) funds to invest in Bitcoin, you might run into a surprising problem.
Image source: Getty Images.
Why it pays to be careful with 401 (k) options for your employer
In a typical 401 (k), the company offers its employees a limited menu of choices in which they can invest, typically mutual funds and ETFs. Some may also allow them to invest in shares of the company. But few companies allow their employees to invest in whatever they want. You can thank the Employee Retirement Income Security Act of 1974 (ERISA) for this.
This law does great things to protect the retirement savings of core workers, including requiring plan trustees (i.e. employers) to act as trustees. This means that they have a legal obligation to take care of their employees’ money. If they don’t, they could be held responsible for the losses suffered by their employees.
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