Trump to Expand 401(k) Investment Options to Include Crypto, Private Equity, and Real Estate
August 7, 2025 – In a significant policy shift, former U.S. President Donald Trump is set to sign an executive order aimed at allowing alternative assets such as private equity, real estate, and cryptocurrency to be included in 401(k) retirement plans. This move could dramatically reshape the landscape of retirement investing for millions of Americans by opening access to a broader range of asset classes traditionally restricted under existing regulations.
Broadening Retirement Investment Horizons
Currently, most 401(k) plans restrict investors to conventional options like stocks, bonds, and mutual funds. Trump’s upcoming executive order directs federal agencies, particularly the Department of Labor, to reevaluate existing rules under the Employee Retirement Income Security Act (ERISA) of 1974, which has historically discouraged the inclusion of illiquid or complex alternative assets in retirement accounts due to fiduciary risk concerns.
The new directive aims to update these guidelines, thereby easing regulatory barriers and allowing employers and plan administrators more flexibility to offer alternative investment options. By including private equity, real estate, and cryptocurrencies in 401(k) plans, Americans could potentially diversify their retirement portfolios with assets that promise higher returns, albeit with higher volatility and complexity.
Regulatory and Fiduciary Considerations
Financial experts and retirement plan fiduciaries face new challenges under this order. Rebecca Loesel, an expert on fiduciary issues, noted that while the order might provide clearer pathways and specific procedures, employers must still exercise a rigorous fiduciary process before adding these options to their plans. This includes detailed consultations with investment advisors to assess whether such investments are in the best interest of plan participants, considering factors like volatility, liquidity, and fee structures.
Despite the potential, some experts urge caution. Alicia Munnell, senior advisor at Boston College’s Center for Retirement Research, voiced concerns about the expansion of alternative assets in retirement plans given the lack of consistent evidence that such strategies outperform traditional investments. She recommends sticking to more conventional, well-understood investment vehicles until a clearer case for alternatives emerges.
Implications for the $12.5 Trillion Retirement Market
The estimated $12.5 trillion retirement savings market stands to be transformed by this policy change. If implemented, this could mark a fundamental shift in how millions of Americans save for retirement, potentially allowing higher growth—but also greater risk—through exposure to less traditional asset classes.
Notably, the Securities and Exchange Commission (SEC) will play a critical role in facilitating cryptocurrency access within 401(k) plans, ensuring regulatory compliance and investor protections keep pace with this expanding investment landscape.
Next Steps and Outlook
As the executive order takes effect, federal agencies will begin evaluating necessary rule changes, working closely with industry stakeholders to balance innovation with investor protection. While some employers may proceed cautiously, the order signals a significant shift toward modernizing retirement accounts to reflect evolving financial markets and investor preferences.
Overall, this initiative marks a pivotal moment in U.S. retirement policy, underscoring the administration’s intent to broaden investment choices and potentially increase retirement wealth accumulation opportunities, albeit with attendant risks that require careful management.