How the SpaceX IPO Will Affect Your 401(k)
Editor's note: SpaceX could end up in your investment portfolio...
Elon Musk's company went public last month, and while it hasn't joined the S&P 500 Index just yet, when it does, it will have a major knock-on effect. That's why Retirement Millionaire editor Dr. David "Doc" Eifrig says you need to prepare now.
In today's Masters Series, adapted from the June 10 issue of the free Health & Wealth Bulletin e-letter, Doc shares how to prevent SpaceX from disrupting your retirement investments...
How the SpaceX IPO Will Affect Your 401(k)
With SpaceX (SPCX) now operating as a public company, every 401(k) saver needs to pay attention...
If you have money in a 401(k), there's a good chance you're invested in an S&P 500 Index fund or target-date fund.
You may be operating under the assumption that your wealth is safely diversified across 500 distinct American corporations.
However, the S&P 500 is a market-capitalization-weighted index. The larger a company grows, the more heavily it's weighted in the index... and the more of your retirement dollars automatically flow into it.
Today, the top 10 stocks in the S&P 500 make up roughly 40% of the index. That means for every $1 you put into your 401(k), $0.40 goes to just 10 names.
That's not diversification.
And the index has become even more concentrated ever since SpaceX went public last month...
SpaceX opened at $150 – surpassing its IPO goal of $135 per share. That provided the company with a valuation of $2.4 trillion. At one point, it was even more valuable than Amazon (AMZN).
While the company brought in $18.7 billion in revenue in 2025, it had a net loss of $4.3 billion in the first quarter of 2026. It's currently burning billions of dollars to build out deep-space infrastructure and interconnected servers.
In short, SpaceX is far from being profitable. Yet 401(k) savers will be forced to own it.
Now, to be clear, SpaceX wasn't able to join a major index like the S&P 500 on Day 1. There are specific criteria the company must meet, like posting four consecutive quarters of profitability. But since this is a massive IPO, SpaceX could be fast-tracked for index inclusion. (Note that the S&P Dow Jones Indices said it wouldn't change the requirements for entry into its major indexes... at least for now.)
Eventually, though, 401(k) participants are going to own SpaceX whether they like the company or not... It has already joined the Nasdaq 100 Index.
And every time an accountant, dentist, or factory worker auto-contributes to their 401(k), an outsized chunk of their capital will be funneled directly into the top 10 stocks, including SpaceX, leaving the bottom 490 companies with crumbs.
In other words, you're no longer buying an index of the American economy with your 401(k)... You're buying a concentrated bet on a few tech giants.
And to make matters worse, SpaceX entered the public market priced to absolute perfection. Its lofty valuation relied heavily on long-dated narratives regarding global telecom dominance, orbital cloud computing, and Mars colonization.
That sounds great and all. But again, the company is burning through a massive amount of cash.
With this in mind, 401(k) retirement savers need to be careful about blindly throwing their money into index funds.
If you're relying entirely on standard capitalization-weighted funds for your nest egg, a future SpaceX inclusion means your retirement security will be increasingly tied to the volatile, capital-intensive trajectory of a few richly valued mega caps.
I sure wouldn't want to have a large portion of my nest egg wrapped up in SpaceX after it goes public. The valuation is simply too rich, and there's too much risk of the company not living up to the hype.
While owning the S&P 500 is the best proven way to grow your wealth long term, there are times when you need to be cautious. Today is one of those times.
Since the index is heavily weighted toward Big Tech, the S&P 500 is trading near its most expensive valuation in history...
My suggestion would be to diversify...
Have a portion of your 401(k) contributing to an equal-weighted S&P 500 fund. Own some gold as a "chaos hedge." And consider even putting some of your money into international funds.
For the average retirement saver, the traditional "set it and forget it" index fund model is losing its historical safety advantage. So make sure to pay attention to what you actually own in your 401(k).
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig
Editor's note: Before joining Stansberry Research, Doc helped build trading algorithms for Goldman Sachs' largest clients. Now he's unveiling "Prototype 216." This project uses the same technology that SpaceX uses to track thousands of Starlink satellites... creating a new way to identify potential market winners before they take off.
Doc is ready to give investors a chance to try this system out for themselves for free. But this offer is only good for a limited time. If you want to be among the first to test Doc's new system, sign up here.