Trump’s 401(k) Shake-Up: What It Could Mean for Your Retirement

 

President Donald Trump has signed an executive order that could reshape America’s retirement landscape—opening the door for private equity, real estate, and even cryptocurrency to be included in 401(k) plans.

The order, titled “Democratizing Access to Alternative Assets for 401(k) Investors,” doesn’t change existing laws. Instead, it directs the Department of Labor to review its guidance and explore ways to make these alternative investments more accessible.

For Wall Street and the private equity industry, it’s a long-awaited victory—tapping into a retirement savings pool worth roughly $12.2 trillion. Advocates argue that alternative assets can offer stronger returns and diversification, much like public pension funds have enjoyed for decades.

“This is a great step toward helping all Americans enjoy stronger returns and a more secure retirement,” said Will Dunham, president of the American Investment Council.

But not everyone is sold. Critics warn these investments often come with higher fees, less transparency, and longer lock-up periods—meaning your money could be tied up for years.

The Risks for Savers

Economist Gopi Shah Goda cautions that alternative investments are “less liquid and more volatile,” and the fees could eat into retirement growth. Private equity valuations can also be murky—based on internal estimates rather than public market prices—opening the door to disputes over whether savers are getting a fair deal.

The Challenge for Plan Administrators

Simon Tang of Accelex points out that transparency is a sticking point:

“Retail investors expect clear, timely updates—like they get with stocks or crypto. Private equity still falls short.”

Managers also face hurdles in educating employees about risk, diversification, and realistic expectations—especially for those used to the instant pricing of public markets.

What’s Next?

Right now, there’s no immediate change—just a 180-day window for the Labor Department to review and clarify its stance. Even if approved, private equity and other alternatives won’t suddenly appear in every 401(k) plan.

Bottom line: The move could open new opportunities for growth—but also new risks. If you’re considering alternative assets in your 401(k), prepare for a very different investing experience, and know that higher costs, lower liquidity, and more complexity could come with the package.