Toomey says investments in private equity and crypto could lead to retirement security
Sen. Pat Toomey (R-Pa.), argued Wednesday that current investment rules prevent many average Americans from having a diversified portfolio, creating a barrier to financial success in retirement.
A recent Gallup poll found that 63% of Americans are worried about having enough money for retirement, marking the first time since 2016 that this number has exceeded six in ten Americans.
Toomey has advocated for portfolio diversification and private equity investing, which could lead more Americans to financial security in retirement, he said at the ‘Securing America’s Retirement’ event. from The Hill.
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 point to his Modernizing Retirement Savings Act, which Pennsylvania Republicans have said he hopes to introduce when he finds a Democratic sponsor. He said the legislation would allow more Americans to take advantage of the high returns that come with investing in private equity.
“For most Americans, their wealth is tied to their home, which isn’t something you negotiate. But the other big category is retirement savings, so for me, that’s just a component. really, really important to enabling ordinary Americans to have a better life and a comfortable retirement,” Toomey, who serves on the Senate Finance Committee, said at the event.
The bill would ensure that asset managers behind defined contribution plans do not break the rules if they invest in other asset classes, such as private equity, which would diversify the investment portfolio of the average American.
“You make it clear that an asset manager would not breach their fiduciary duties just by investing in alternative asset classes. All other fiduciary duties still apply. You still have the diversity requirements, you still have all the prudential requirements, but you don’t systematically exclude this huge category,” Toomey said at the event, sponsored by the American Investment Council.
While other asset classes, such as commodities, real estate and private equity, have been around for a long time, Toomey also called for the inclusion of a new type of investment: cryptocurrency, a digital currency that is transferred through online rather than traditional networks. establishments.
“It should only be a small part of a retirement portfolio, but I think it would be a big mistake to exclude it. We just don’t know where it takes us, and I actually think technology underlying is very, very powerful,” Toomey said.
Update 1:45 p.m.