Toomey says that investments in private equity and crypto can lead to security in retirement

Sen. Pat Toomey (R-Pa.) Claimed on Wednesday that current investment rules exclude many average Americans from having a diversified portfolio, which creates a barrier to achieving financial success in retirement.

A recent Gallup poll found that 63 percent of respondents are worried about having enough money for retirement, which marks the first time since 2016 that the number has exceeded 6 out of 10.

Toomey argued for diversifying portfolios and investing in private equity, which could lead more Americans to financial security in retirement, he said at The Hills’ “Securing America’s Retirement” event.

However, the current system often prevents people with defined contribution plans, such as 401 (k) s, from investing in a number 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 allow 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, as it’s not something you shop for. But the other big category is retirement savings, so for me this is just a very, very important part of letting ordinary Americans get a better deal. life and a comfortable retirement, Toomey, who sits on the Senate Finance Committee, said during the event.

The bill will ensure that asset managers behind deposit plans do not break the rules if they invest in other asset classes, such as private equity, which will diversify the average American’s investment portfolio.

“You make it clear that an asset manager will not breach its fiduciary obligations solely by investing in alternative asset classes. All the other fiduciary obligations still apply. You still have the diversity requirements, you still have all the precautionary requirements there, but you do not systematically exclude this huge category, Toomey said at the event, which was 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 newer type of investment: cryptocurrency, a digital currency that is transferred through networks instead of traditional ones. institutions.

“This should only be a small part of a pension portfolio, but I think it would be a big mistake to exclude it. We just do not know where this is going, and I actually think the underlying technology is very, very powerful,” Toomey said.

Updated at 13:45