Trump Signs Executive Order to Expand 401(k) Investment Options to Private Assets and Cryptocurrencies
Washington, D.C. — On August 7, 2025, President Donald J. Trump signed an executive order aimed at broadening the scope of investment options available to American workers participating in 401(k) and other defined-contribution retirement plans. The order makes it easier for Americans to allocate a portion of their retirement savings to private assets such as private equity, alternative investments, and cryptocurrencies.
The move seeks to provide over 90 million Americans with access to asset classes traditionally reserved for wealthy individuals and institutional investors like government pension funds. Currently, many retirement plans are limited mainly to public equities and bonds, which restricts diversification opportunities and potential for higher returns that alternative assets might offer.
According to the White House fact sheet, the order directs fiduciaries of 401(k) and other retirement plans to carefully vet private offerings and investment managers but aims to remove regulatory burdens and legal risks that have historically discouraged inclusion of alternative assets in retirement portfolios. It encourages prudent investment in these assets to mirror the allocations seen in public pension and defined-benefit plans, where alternative investments form an increasing portion of the portfolio.
“Many wealthy Americans, and Government workers who participate in public pension plans, can invest in, or are the beneficiaries of investment in, a number of alternative assets,” the executive order states. “Yet, the vast majority of these investors do not have the opportunity to participate, either directly or through their retirement plans, in the potential growth and diversification opportunities associated with alternative asset investments.”
The order also addresses the challenges caused by burdensome lawsuits and Department of Labor guidance that have limited fiduciaries’ efforts to incorporate private assets. By reducing these hurdles, the administration aims to “democratize” access to a wider array of investments and potentially enhance retirement outcomes.
However, the executive order has drawn immediate criticism from several policymakers. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, released a statement warning that the change could expose Americans’ retirement savings to risky investments with little transparency and weak protections. She expressed concern that private equity funds, known for charging high fees, have often failed to deliver promised returns and cautioned against the inclusion of highly volatile cryptocurrency assets in retirement plans.
“President Trump just granted private equity billionaires their biggest wish: access to Americans’ retirement savings,” Senator Warren said. “It’s a rotten deal: the data shows private equity has failed to deliver the returns it has promised while saddling investors with exorbitant fees. Trump’s executive order will expose Americans’ retirement savings to risky investments with little transparency and weak protections—as well as to highly volatile crypto assets. It’s just another Trump giveaway to the billionaires on the backs of working people.”
Supporters argue the policy opens new doors for retirement plan participants to potentially increase their returns and diversify their portfolios, which could be particularly beneficial in an era of low interest rates and market volatility.
The costs associated with implementing the publication of this executive order are to be borne by the Department of Labor, according to the official text.
As Americans approach retirement, the expanded investment options introduced by this executive order present both potential opportunities and risks. Retirement plan administrators and participants will be watching closely as the regulatory framework evolves around private assets in 401(k) plans.