Trump Executive Orders Allow 401(k)s to Include Private Equity and Crypto

President Donald Trump has introduced a series of executive orders in late July and early August 2025 that aim to reshape the investment landscape for U.S. retirement savings by allowing 401(k) plans to include alternative assets such as private equity and cryptocurrencies. The Department of Labor has been instructed to revise fiduciary duty rules that previously limited such investments, while the SEC and Treasury are tasked with streamlining the inclusion of these assets into defined-contribution plans [1]. This move comes after intense lobbying by private capital and crypto interest groups, signaling a significant shift in retirement policy [1].

Supporters argue that the change offers retirees access to historically high-performing asset classes. For example, some analysts predict that private equity portfolios could generate nearly 9% annual returns over the next decade, surpassing traditional 70/30 stock-bond allocations [2]. Brianne Lynch of EquityZen points out that the long-term nature of retirement accounts aligns well with the illiquid characteristics of private assets [3]. This policy aligns with Trump’s broader vision of expanding investment opportunities beyond traditional markets and into high-growth sectors.

However, the move has also raised substantial concerns. Critics warn that private equity and cryptocurrencies are inherently opaque, illiquid, and require specialized knowledge to navigate effectively. Andrew Herzog of The Watchman Group notes that the lack of real-time pricing in private markets can distort the true value of investments, complicating portfolio management and financial planning for retirees [4]. Additionally, private companies are not bound by the same transparency and reporting standards as public firms, increasing the risk of misrepresentation or fraud [4].

Public Employees’ Retirement System (PESP) has criticized the order, suggesting it may favor Wall Street institutions at the expense of individual retirement savers. They argue that the new rules could expose participants to higher fees and suboptimal returns without sufficient safeguards or education [5]. Others stress the importance of investor protection and regulatory clarity, noting that the success of this initiative will depend on the Department of Labor’s ability to implement clear guidelines and robust disclosures [6].

With over $12.2 trillion in U.S. defined-contribution plans, the potential impact of this shift is considerable. The policy could redirect substantial capital into private markets and digital assets, reshaping the broader financial landscape. While some view this as an opportunity to align retirement savings with the growth of the private sector, others caution against the risks associated with increased volatility and regulatory gaps [6].

The full implications of Trump’s executive orders are expected to become clearer as regulators draft the necessary rules and market participants adjust to the new environment. For now, the debate highlights the tension between expanding investment opportunities and ensuring that retirees are adequately protected from the inherent risks of alternative assets [7].

Source:

[1] Financial, [https://www.ft.com/content/6647ad13-0954-4257-8112-cb02e9515cf6](https://www.ft.com/content/6647ad13-0954-4257-8112-cb02e9515cf6)

[2] Investopedia, [https://www.investopedia.com/trump-wants-private-equity-in-401ks-what-it-means-for-your-retirement-savings-11787500](https://www.investopedia.com/trump-wants-private-equity-in-401ks-what-it-means-for-your-retirement-savings-11787500)

[3] The New York Times, [https://www.nytimes.com/2025/08/09/business/dealbook/401k-private-equity.html](https://www.nytimes.com/2025/08/09/business/dealbook/401k-private-equity.html)

[4] Yahoo Finance, [https://finance.yahoo.com/news/experts-advise-caution-in-adding-private-assets-like-crypto-to-401ks-153313520.html](https://finance.yahoo.com/news/experts-advise-caution-in-adding-private-assets-like-crypto-to-401ks-153313520.html)

[5] FOX 2 Now, [https://fox2now.com/business/press-releases/ein-presswire/838081083/pesp-warns-trump-executive-order-puts-401k-retirement-savings-at-risk](https://fox2now.com/business/press-releases/ein-presswire/838081083/pesp-warns-trump-executive-order-puts-401k-retirement-savings-at-risk)

[7] CBS News, [https://www.cbsnews.com/news/trump-401k-changes-executive-order-risk-what-to-know/](https://www.cbsnews.com/news/trump-401k-changes-executive-order-risk-what-to-know/)