Trump’s Executive Order on 401(k)s & Alternative Assets: What It Means for Your Retirement

On August 7, 2025, President Donald Trump issued a landmark Executive Order titled “Democratizing Access to Alternative Assets for 401(k) Investors.” This directive expands investment options in employer-sponsored retirement plans, such as 401(k)s, by allowing access to private equity, real estate, infrastructure projects, commodities, and even cryptocurrency. For millions of Americans, this could dramatically change the way retirement wealth is built.

What the Executive Order Involves

The Department of Labor has been instructed to revise fiduciary guidance under ERISA so plan fiduciaries can consider alternative assets if they enhance risk-adjusted returns. The SEC and Treasury have also been tasked with drafting regulations to support this change. The underlying goal is to democratize investment opportunities that were once only available to institutional investors and the ultra-wealthy.

The Executive Order defines “alternative assets” broadly, including:

• Private market investments (equity and debt not publicly traded)

• Real estate and real estate debt instruments

• Digital assets, such as managed crypto portfolios

• Commodities

• Infrastructure financing projects

• Lifetime income strategies like longevity risk-sharing products

Why This Matters: Opportunities & Benefits

Supporters of the policy highlight several potential advantages:

• Stronger long-term growth: Some estimates suggest that diversified portfolios including alternatives could see up to 15% more growth over 40 years.

• Inflation protection: Real estate and infrastructure can serve as natural hedges against rising costs.

• Leveling the playing field: For the first time, everyday workers could access investment opportunities once reserved for wealthy investors and large pension funds.

• New products and services: With nearly $12 trillion in retirement savings unlocked, firms like Blackstone, KKR, Apollo, and BlackRock are expected to introduce innovative retirement products.

The Risks and Concerns

Alongside the potential benefits come several challenges that retirement savers should weigh carefully:

• Illiquidity: Many alternative assets are difficult to sell quickly, complicating withdrawals or job changes.

• Lack of transparency: Unlike public markets, private investments often provide limited visibility into performance.

• Higher fees: Management and performance costs are usually much higher than those for mutual funds or ETFs.

• Complexity: Most savers may not fully understand these investments, raising the risk of uninformed decisions.

• Legal exposure: Fiduciaries could face lawsuits unless the Department of Labor issues clear safe harbor protections.

• Volatility: Cryptocurrencies in particular carry extreme price swings that can erode retirement savings.

Who Might Benefit—and Who Should Be Cautious

The policy won’t affect everyone the same way.

Best suited for:

• Long-term investors with 20+ years before retirement

• Savers who want more diversification and inflation protection

Proceed with caution if you are:

• Nearing retirement and need easy access to funds

• Uncomfortable with financial complexity or high risk

It’s important to note that this Executive Order does not require anyone to invest in alternative assets. It simply adds more options to the 401(k) menu, while traditional stock and bond funds remain available.

What’s Next

Over the next six months, the Department of Labor, SEC, and Treasury will draft regulations and provide safe harbor guidance to fiduciaries. Once finalized, employers and plan sponsors will have to decide whether to offer these new options. Expect to see new collective investment trusts, target-date funds, and hybrid products that combine traditional investments with alternatives.