President Donald Trump just reshaped the retirement landscape with a bold stroke of his pen. On Thursday, August 7, 2025, he signed an executive order opening the door to alternative assets in workplace retirement plans like 401(k)s. This isn’t just a tweak—it’s a potential game-changer for how Americans build wealth.
According to CNBC, this order allows investments in private equity, cryptocurrencies, and real estate within 401(k) accounts, a move that could redefine retirement saving for millions.
Let’s start with the basics of this shift. Historically, 401(k) plans have stuck to safer, more predictable options like stocks and bonds. Now, Trump’s directive introduces nontraditional assets that were once the playground of the ultra-wealthy.
Private equity, for instance, involves funds that pour money into non-publicly traded companies. Think of it as betting on businesses before they hit the stock market. It’s a strategy often limited to accredited investors—those with incomes over $200,000 or a net worth above $1 million.
This change is a massive win for big money managers like BlackRock. Their CEO, Larry Fink, champions the idea, saying, “Democratizing private markets could provide market-beating long-term returns for American workers.” They stand to gain as everyday savers tap into an asset class that’s been exclusive for decades.
But here’s the catch: private equity isn’t a walk in the park. These funds often charge hefty fees—think 2% annually plus 20% of profits over a threshold—compared to dirt-cheap index funds. Plus, they’re illiquid, locking up your money with rigid holding periods and limited options to cash out.
Then there’s the issue of transparency—or the lack of it. Private equity funds face less regulation than mutual funds or ETFs, meaning you might not fully grasp their complex strategies, like leverage or concentrated bets on private firms. As Jerry Schlichter of Schlichter Bogard warns, “If you don’t understand the investment, you shouldn’t depend on it for your retirement assets.”
Cryptocurrencies add another layer of uncertainty to this mix. They lack a proven track record over decades, and their short-term performance has been wildly erratic. Schlichter puts it bluntly: “There’s no long-term performance history for cryptocurrency, and the short- to intermediate-term has been all over the place.”
He drives the point home on the risks. “This is not the kind of investment that people want and deserve when they need to have something that’s protected for their years in retirement.” It’s a sobering reminder for savers dreaming of quick crypto gains.
Even accessing your money in private equity can be a headache. Unlike stocks or bonds, there’s no ready market to sell shares, as Charles Rotblut of the American Association of Individual Investors notes: “There’s just no market for it.” Withdrawals from a 401(k) tied to these assets could become a logistical nightmare.
Moreover, some funds hold cash for redemptions instead of investing it, which can drag down returns. That’s your retirement money sitting idle—not exactly the wealth-building dream. Compare that to diversified index funds, which experts say offer consistent, long-term growth with minimal fees. Schlichter highlights the fee disparity, noting of index funds, “They’re almost free these days.” Why pay more for riskier, less liquid options when proven alternatives exist? It’s a question every saver should wrestle with.
Advocates argue these assets could boost returns, pointing to pension funds that often outperform 401(k)s by investing in private equity. Yet, experts remain split on whether these funds consistently beat broad market indexes over time. Sam Stovall of CFRA cautions, “You have to know what you own.”
So, what’s the takeaway for your retirement strategy? Approach this expansion with eyes wide open—research every asset, weigh the risks, and don’t abandon the tried-and-true diversified portfolio. If you’re tempted by private equity or crypto, consider allocating only a small portion of your savings, and always prioritize liquidity and low costs.
Trump’s order is a nod to free-market choice, but it’s not a blank check to gamble your nest egg. Stay skeptical of flashy promises, stick to fundamentals, and remember: building wealth is a marathon, not a sprint. Your future self will thank you for playing it smart.