$9 Trillion Unlocked: Trump Greenlights Risk Assets in 401(k)s
In a seismic shift for retirement investing, former President Donald Trump has signed an executive order allowing crypto, private equity, and real estate to be included in 401(k) retirement accounts. The order directs federal regulators to revise current laws and open the gates for $9 trillion in retirement assets to flow into less liquid and more volatile investments—a move already making waves across Wall Street and Washington.
This move grants professional fund managers the power to offer riskier, alternative investments to nearly 90 million Americans, who until now were mostly confined to traditional assets like stocks, bonds, and index funds.
Crypto Lobbying Played a Pivotal Role
This sweeping policy change didn’t come out of nowhere. Crypto executives and private equity firms have been aggressively lobbying for access to the lucrative 401(k) market. According to insiders, it was crypto lobbying in particular that helped push the order across Trump’s desk.
Trump, known for his recent pro-crypto pivot, has already softened banking restrictions and regulatory scrutiny for the digital asset sector. Now, his administration is handing the crypto industry a massive new pipeline to trillions in capital—right through retirement plans.
Major financial firms like BlackRock, Apollo, Blackstone, and KKR are already striking deals with 401(k) administrators to package crypto and private investments into these plans.
Retirement Experts Sound the Alarm
While the executive order gives lawmakers the authority to rewrite legal protections, it doesn't mandate the inclusion of these assets. But it removes long-standing legal roadblocks, which had previously made plan managers fearful of being sued if these riskier bets underperformed.
Concerns remain high. Private equity and crypto are notoriously hard to price, often illiquid, and come with hefty management fees. Financial advisors have warned that many Americans have little to no understanding of how these assets work—and could be vulnerable to unexpected losses.
Kirchenbauer added that private assets are harder to cash out, making them unsuitable for investors who may need quick liquidity due to Required Minimum Distributions (RMDs) or job changes.
The Default Dilemma: Most Workers Don’t Choose Their Funds
Despite the headline changes, most 401(k) users don’t actively manage their portfolios. They’re auto-enrolled into target-date funds, which balance risk based on when someone plans to retire. In 2024, over 80% of users remained in these default funds, according to Vanguard.
That’s exactly what BlackRock CEO Larry Fink wants to change. He recently proposed replacing the classic 60/40 portfolio (stocks/bonds) with a 50/30/20 mix—allocating 20% to private assets like real estate, infrastructure, and credit. He claims pension funds already use these strategies and have outperformed 401(k)s by 0.5% annually.
While private investments have always been technically legal in retirement plans, few plan administrators knew how to incorporate them. Now, with regulatory backing, adoption could ramp up—but it comes with serious learning curves for both employers and savers.
What’s Next for America’s Retirement Landscape?
Trump’s directive doesn’t make anything automatic, but it strongly nudges regulators and Congress to support new investment frameworks. With crypto prices surging and private capital hungry for fresh liquidity, retirement funds are now a battleground between traditional safety and high-risk/high-reward plays.
For younger investors willing to ride long-term trends, this may offer diversification opportunities. But experts urge caution—especially for those nearing retirement.
As America’s retirement plans tilt toward alternative assets, the question is no longer if change is coming, but how fast and how prepared investors really are.
