Imagine unlocking a treasure chest of investment options for your retirement savings. On Thursday, August 7, 2025, President Donald Trump signed an executive order that could reshape how Americans build wealth through their 401(k) plans. This bold move opens the door to alternative assets like private equity, cryptocurrency, and real estate.
According to NBC News, Trump’s directive aims to let everyday savers tap into roughly $12.2 trillion in retirement funds for potentially higher returns, while sparking debate over the risks and costs involved.
For too long, retirement savers have been boxed into traditional investments like mutual funds and ETFs. This executive order challenges that status quo, offering a broader menu of choices. It’s a win for liberty in financial decision-making, and a nod to the asset management industry eager to manage these funds.
Let’s be clear: private assets can be lucrative. They often promise higher returns than the standard fare in 401(k) plans. But as financial expert Robert Brokamp notes, “There is a lot less transparency and liquidity in private markets.”
Brokamp adds, “There’s not as much information about the companies, and it could be hard to sell your investments — especially during a panic.” This lack of clarity and ease of exit could trap investors in a bind when markets turn south.
Then there’s the cost. Fees for private funds can hit 1% to 2% in management costs, plus up to 20% in performance fees, dwarfing the 0.3% typical of target-date mutual funds. Interval funds? They’re even pricier at 2% to 3%.
The Securities Industry and Financial Markets Association (SIFMA) backs this shift, with CEO Kenneth E. Bentsen Jr. stating, “Policy changes to expand access to private markets investments … could serve to improve diversification.” Their stance reflects a belief in democratizing wealth-building tools. Yet, not everyone is on board.
Employers, who ultimately decide whether to offer these options, may hesitate due to liability fears. If investments sour, they could face blame for losses. Updated guidance from the Department of Labor, due within 180 days, might nudge them forward.
The executive order also tasks the Securities and Exchange Commission with exploring ways to ease access to these assets. However, experts caution that actual changes could take months to materialize. Patience will be key for savers eyeing this space.
Cryptocurrency, while technically allowed in 401(k)s, remains rare and fraught with unique dangers. Benjamin Schiffrin of Better Markets warns, “It’s not clear what, if any, protections investors are going to have when it comes to investing in crypto.” This uncertainty amplifies the stakes.
Critics like Knut Rostad of the Institute for the Fiduciary Standard predict disaster, saying, “The result will be a massive train wreck where many people are seriously hurt.” Their concern centers on uninformed savers gambling their nest eggs.
Anh Tran of SageMint Wealth echoes this, noting, “It could be detrimental to less-informed investors whose only investment account is their 401(k).” Education and strict limits are non-negotiable to prevent widespread harm.
What can you do now? Start by educating yourself on alternative assets—knowledge is your first defense against risk. Younger investors or those without advisors need this most. Advocate for transparency and safeguards if your employer considers these options. Suggest caps, like limiting exposure to 5% or 10% of your portfolio, as Tran advises. This balances opportunity with caution.
Finally, keep a close eye on government updates over the next 180 days. Trump’s order has lit a fire under the wealth-building debate, but it’s up to you to stoke your financial future. Stay skeptical, stay informed, and let’s see if this policy truly delivers freedom—or just more risk.