Your 401(k) to the moon?

Now a large selection of index funds that Americans own through their 401(k)s or other employer-provided retirement plans are poised to purchase SpaceX shares at market price soon as passive investments once trading begins.

“If you're invested in a broad-based index fund that holds the entire stock market, you're going to be buying SpaceX, whether you like it or not,” said James Angel, a finance professor at the McDonough School of Business at Georgetown University.

Stock indexes such as the Nasdaq and S&P 500 track a collection of publicly-traded firms that provides investors with a visible barometer of a specific market sector or the U.S. economy at large. Not every major financial index followed suit in accommodating SpaceX. The S&P said earlier this month that it wasn’t rewriting its rules to fast-track the space rocket company’s inclusion. 

The risks and benefits of SpaceX in retirement plans

For a passively-managed index fund, buying shares from a company helmed by Musk isn’t new. Tesla $TSLA is already embedded within plenty of low-cost index funds since joining the S&P 500 in 2020. The company makes up 2% of the S&P 500, so Tesla’s performance affects American retirement portfolios.

Fidelity slashed the brokerage account threshold from $500,000 to only $2,000 to allow small retail clients to jump into the SpaceX IPO. Their customers can decide for themselves if they want to purchase the stock. That won’t apply to passive managers of stock index funds, since they must add a stock to their portfolio once it starts trading on the index they’re tracking.

In some cases, the returns may be enormous. In Canada, the Ontario Teachers’ Pension Plan could generate an $11 billion windfall from an initial $300 million investment that it signed off on in 2019, according to the Globe and Mail. At the time of the investment, SpaceX was valued between $33 billion and $36 billion, or about 2% of its anticipated IPO. The pension fund covers 346,000 current and retired teachers.

Investors' hype isn’t limited to SpaceX. Both Anthropic and OpenAI are expected to launch mega IPOs of their own, and shares of both could also end up in 401(k plans as well.

The prospect of Musk becoming the world’s first trillionaire first raised eyebrows last year even among centrist Democrats wary that a “new Gilded Age” is setting in. Traders on the Polymarket and Kalshi prediction market platforms are wagering with near-certainty he’ll achieve that record.

Musk does have skeptics regarding his business acumen. Observers note that SpaceX lost $4.9 billion last year, and the company reported losing almost an equivalent amount in the first quarter of 2026. Some market analysts predicted that SpaceX’s stock price will fall significantly after it goes public. The financial services firm Morningstar forecasted that SpaceX is valued at $63 per share.

“We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO,” Morningstar analysts wrote in a Monday note. Separately, a Truist analysis showed that tech IPOs had an average drawdown of 55% in their first year of trading, an indication of a possible slump for SpaceX.

Risk tolerance will likely vary depending on age among other factors. Last month, pension managers in California and New York wrote a letter to Musk expressing concern that SpaceX will be “an unavoidable holding in our portfolios” and pushing for “baseline protections” for stockholders since they have few levers to influence Musk.

“When you're young and you've got decades to go before retirement, you've got time to ride the roller coaster because we know that history shows that stocks are volatile,” Angel said. “When your gray hair starts falling out, then you’ve got to worry more about the short-term risk.”