U.S. President Donald Trump has signed a sweeping executive order that reshapes how Americans can invest for retirement. The new directive allows cryptocurrencies, private equity, and real estate to be included in 401(k) accounts—opening the door for up to $9 trillion in retirement savings to flow into higher-risk, less-liquid asset classes.

This shift could dramatically change the way U.S. pension portfolios are constructed, giving retirement savers access to markets traditionally limited to institutional investors.

A New Horizon for 90 Million U.S. Workers

The executive order instructs federal regulators to revise existing laws so that 401(k) plan managers can begin offering these alternative investment options to more than 90 million workers.

Until now, these retirement plans were limited to conventional asset classes such as stocks, bonds, and index funds like the S&P 500. Trump’s directive changes that, aiming to broaden access and flexibility for savers.

Crypto Lobbying and Wall Street Giants Pushed It Through

Behind the scenes, private equity firms and crypto fund managers had been lobbying Washington for months, seeking access to the 401(k) market. But it was the crypto industry that helped seal the deal.

Trump has been a vocal supporter of crypto, easing regulatory pressure on firms, halting investigations, and rolling back banking restrictions. Token prices surged under his leadership, and his family now holds significant stakes in companies with strong crypto exposure.

Major players like Blackstone, Apollo, BlackRock, and KKR have already begun forming partnerships with 401(k) plan providers, eager to enter the space after years of lobbying.

Lingering Concerns: High Risk, High Fees, and Low Liquidity

A similar effort was made at the end of Trump’s first term, but plan administrators pushed back. They feared being sued if risky investments underperformed. Private equity is known for high fees, leverage, and complex valuation models, making it harder to manage within retirement plans.

These concerns haven’t gone away, but Trump’s directive gives lawmakers and regulators a green light to rework legal protections, allowing employers and fund managers to offer alternatives more safely.

Importantly, the order doesn’t mandate these changes—it simply empowers agencies and Congress to act. While the doors are now open, most Americans still have little understanding of what these investments entail.

Most Americans Stick to Target-Date Funds

The majority of 401(k) participants don’t pick individual assets. Their funds are automatically placed into target-date funds, which gradually shift asset allocation as retirement approaches. According to Vanguard, over 80% of 401(k) users stayed in these funds in 2024, and two-thirds of all new contributions flowed into them.

BlackRock CEO Larry Fink believes this is a missed opportunity. He proposes replacing the traditional 60/40 split (stocks/bonds) with a new model: 50% stocks, 30% bonds, and 20% alternatives like real estate, credit, and infrastructure.

In a letter to clients, Fink argued that pension funds using this strategy outperform traditional 401(k) portfolios by about 0.5% annually—a small but compounding edge over time.

Experts Warn: Don’t Invest in What You Don’t Understand

Technically, private investments are already legal in retirement accounts. But most 401(k) plan designers avoid them due to complexity and regulatory ambiguity.

Financial advisor Lisa Kirchenbauer of Omega Wealth Management cautioned that these assets aren’t for everyone:

“They all come with different risks and returns. If you don’t understand them, stick with traditional investments,” she told Yahoo Finance.

She added that private assets are harder to sell. Those who need quick liquidity—for required minimum distributions (RMDs) or job transitions—might find crypto or private equity investments unsuitable.

Conclusion: Potentially Smart, But Only for the Right Investor

For long-term investors who can afford to wait, allocating 5–10% of their 401(k) into alternatives might make sense. But for most near-retirees, staying with target-date funds remains the safer route.

Typically, individuals choose a fund that aligns with their Social Security full retirement age, usually around 67. Younger or more aggressive investors may select a later date, while conservative savers choose earlier ones.

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