Alternative assets in 401(k)s may sound technical but carry a big idea: soon, retirement savers could invest in things beyond stocks and bonds. On August 7, 2025, President Donald Trump signed an executive order that opens the door for 401(k) plans to include alternative investments like private equity, real estate, and even cryptocurrencies.
What’s happening?
The order instructs the U.S. Department of Labor and the Securities and Exchange Commission to rethink their rules under ERISA (Employee Retirement Income Security Act). The goal is to make it easier for retirement accounts to include alternative assets when fiduciaries deem them suitable.
These alternative assets—private equity, real estate, digital currencies, commodities, infrastructure projects, and more—have traditionally been limited to wealthy or public-sector investors. The administration calls it “democratizing access to alternative assets” for the typical worker.
Why does it matter?
Potential for higher returns and diversification
Alternative assets often promise higher returns and can spread investment risks beyond stocks and bonds.
Huge market unlocked
The move opens a doorway to a roughly $12 trillion defined-contribution retirement market. Major firms like BlackRock, Blackstone, KKR, Apollo, and others could tap into new investor funds.
Firms already getting ready
BlackRock is planning a 401(k) fund with private equity and private credit investments. Others like Blue Owl Capital and Empower are also preparing new retirement products.
What are the risks?
Higher complexity and fees
These investments are not as transparent or easy to sell as stocks or bonds and often come with higher fees.
Liquidity concerns
Real estate and private equity are not designed for quick cash-out. It can take years to turn them into cash.
Legal and regulatory worries
Fiduciaries—those who manage retirement funds—face potential lawsuits if investments go bad. The executive order urges agencies to clarify safe harbors and streamline legal uncertainty.
Volatility, especially in crypto
Cryptocurrencies are known for sharp price swings and remain largely underregulated. Adding crypto to retirement accounts could expose savers to risk.
May benefit the wealthy more
These investments typically favor those who understand them and can afford the fees. Critics argue this expansion may not benefit average savers as much as the industry claims.
What comes next?
Hundreds of days of rule-making ahead
The Department of Labor and SEC have 180 days to review guidance, propose regulatory changes, and possibly offer safe harbors for fiduciaries.
Industry response already underway
Major firms are planning new fund types and partnerships. BlackRock’s fund is expected in 2026, while others like Blue Owl and Empower are also moving quickly.
Slow rollout expected
Even after final rules, employers and plans will take time to introduce these options. It could be years before crypto or private equity investments appear widely in 401(k) menus.
Why it matters to Americans
Broader choices
Savers may gain access to investment options once reserved for elites. Alternative assets may offer diversification and higher long-term returns.
Greater complexity
Choosing these options requires more due diligence. Employers and investors must understand fees, lock periods, risks, and whether the managers are trustworthy.
Protecting your retirement
As changes unfold, it is important to know your plan, ask questions, and consider keeping a mix of traditional stocks and bonds until new options prove their value.
Summary
Alternative assets in 401(k)s could reshape retirement saving as we know it. Trump’s executive order opens the possibility—but not the guarantee—of adding private markets, crypto, and real estate to retirement plans. It is a move that promises opportunity but also brings caution. With rule-making and industry response still underway, now is the time to stay informed, ask smart questions, and weigh both the potential rewards and the risks ahead.
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