Something big just happened to your retirement savings — and you didn’t vote for it.
Last August, President Donald Trump signed an executive order directing the Department of Labor to open 401(k) plans to “alternative assets” — Wall Street shorthand for things like private equity, hedge funds, and cryptocurrencies.
On March 30, 2026, the DOL followed up with a proposed rule to make it reality. The rule creates a legal “safe harbor” that shields employers from lawsuits if they add these higher-risk options to plan menus, effectively removing the main deterrent that’s kept them out until now.
The industry is framing this as “democratizing” access to investments once reserved for the wealthy. I’ve got a different frame: It’s primarily good for the firms that create and sell these products. Here are six reasons why.
1. The fees will eat your returns alive
The single most powerful thing you can do for your 401(k) is keep costs low. Fees are the one variable in investing you can actually control, and they compound against you just as relentlessly as returns compound for you.
Right now, the average target-date fund charges about 0.29% per year, according to Morningstar. Many S&P 500 index funds charge less than 0.05%. That’s the low-fee environment your retirement account has benefited from for decades.
Alternative assets are a completely different world. Private equity funds typically charge management fees of 2% or more, plus “performance fees” of up to 20% of any gains. That’s the “2-and-20” structure Wall Street loves, and it has made private equity managers extraordinarily rich.
The math isn’t complicated. As we’ve detailed in “Of All the Fees You Pay, This Is the Worst,” even a single percentage-point difference in annual fees can cost you six figures over a career. Add a 2% management fee on top of that and you’re writing a very large check to Wall Street every year — whether or not they beat the market.
2. The performance often doesn’t justify those fees
The pitch from the alternative asset industry is seductive: Private equity has historically beaten the public markets. What they’re less eager to tell you is that the advantage often evaporates once you account for fees and the quality of deals actually available to ordinary investors.
High-net-worth individuals and large institutions typically get access to the best private equity funds. Everyday 401(k) participants get whatever’s left — often lower-quality, higher-risk deals that the big money passed on.
Warren Buffett famously bet that a low-cost S&P 500 index fund would outperform a carefully managed portfolio of hedge funds over 10 years. He won, and it wasn’t close. The lesson still stands. For more on why, see “Why Investing in Index Funds Is Good for Your Retirement.”
3. Crypto is not a retirement investment
Let me be direct about the “digital assets” part of this.
Bitcoin peaked above $120,000 in 2025. Within months it lost more than 30% of its value. The $TRUMP meme coin — launched by Trump just before taking office — peaked at around $45 before collapsing to under $3, according to NBC News. That’s a more than 90% wipeout.
These aren’t edge cases. They’re the normal behavior of speculative assets. Your 401(k) is a decades-long project. It’s the money you’re counting on to be there when you retire. Assets that can lose most of their value in a year don’t belong in it.
The Biden-era DOL explicitly warned that plan fiduciaries — the employers and advisors legally required to act in workers’ best interests — should exercise “extreme care” before adding crypto to a plan menu, citing fraud risk, volatility, and regulatory uncertainty.
The Trump DOL rescinded that guidance in May 2025. The justification? “Extreme care” isn’t language found in the law. That may be technically true. But smart investing advice doesn’t need a legal citation.
For more on what that rollback means for your savings, see “Crypto Meets Your 401(k): A Risk Too Big for Retirement?”
4. You may not be able to get your money when you need it
Traditional 401(k) investments — stocks, bonds, mutual funds — are liquid. You can sell them any business day. Private equity and many alternative assets are not.
When you invest in a private equity fund, your money is typically locked up for years. There’s no “sell” button. If the market tanks, if you lose your job, or if you face a medical emergency, you may simply be stuck.
This isn’t theoretical. A record 6% of workers in Vanguard-administered 401(k) plans took hardship withdrawals in 2025, triple the pre-pandemic rate, according to CBS News. If a significant portion of your retirement is locked in an illiquid alternative fund at exactly that moment, the consequences can be severe.
5. You may get these assets whether you choose them or not
Here’s the part that doesn’t get nearly enough attention: You may end up with alternative assets in your 401(k) even if you never actively choose them.
Most 401(k) plans automatically enroll new workers into a default investment, and that default is almost always a target-date fund. These are all-in-one funds that gradually shift from aggressive to conservative as you approach retirement. They run on autopilot. Most workers never change them.
Now, BlackRock — the world’s largest asset manager — is launching a target-date fund that includes a 5% to 20% allocation to private assets, according to Bloomberg. State Street has announced a similar product. These aren’t niche offerings for adventurous investors. They’re designed to be the default fund in auto-enrollment plans.
If your employer adopts one of these as the plan default, private equity ends up in your retirement account automatically — without you ever lifting a finger or making a single decision. That’s not democratizing investing. That’s the financial industry inserting itself into your savings without your knowledge.
6. The president who signed the order — and his allies — stand to profit
This is important, and it’s also being underreported.
Trump signed the executive order on August 7, 2025, using presidential authority alone — no act of Congress, no public debate, no vote. With a stroke of a pen, he set in motion a process that could redirect a portion of the $10.1 trillion sitting in American 401(k) plans toward an asset universe that includes cryptocurrencies and private equity funds he and his closest allies directly profit from.
Start with Trump himself. According to NBC News, the Trump family company receives up to 75% of revenues from sales of the World Liberty Financial cryptocurrency token after expenses. Trump reported more than $57 million in income from World Liberty on his 2025 financial disclosure form.
He also launched the $TRUMP meme coin days before his second inauguration. A Marquette University finance professor found it generated more than $324 million in trading fees accruing to insiders, while roughly 2 million ordinary retail investors are currently underwater.
Then there’s Blackstone CEO Stephen Schwarzman, the head of the world’s largest private equity firm and chairman of Trump’s now-disbanded Strategic and Policy Forum. Schwarzman donated $5 million to Trump’s MAGA Inc. super PAC in late 2025.
He has openly said that getting Blackstone into the 401(k) market is one of his firm’s core ambitions — and with institutional fundraising in a slump, Fortune reports that retail investors are increasingly how private equity plans to sustain its growth.
And then there’s BlackRock. CEO Larry Fink — now described as part of Trump’s inner circle after brokering the Panama Canal port deal — is simultaneously the man launching the first target-date retirement fund with private assets designed to become the default option in millions of 401(k) plans.
The White House has denied any conflicts of interest. But the financial relationships exist whether or not you call them conflicts.
When the people who wrote, championed, and benefit from this rule are the same people whose firms stand to collect billions in new management fees from your retirement account, you’re entitled to ask: Whose retirement is really being protected here?
What you should do right now
None of this means alternative assets are fraudulent or that they’ve never worked for anyone. Wealthy individuals and large institutions have used them for decades — in small allocations, with expert research, and with the financial cushion to absorb serious losses.
Your 401(k) is different. It’s probably the largest savings account you have. The firms pushing for crypto and private equity in your plan aren’t doing it out of generosity.
They’re doing it because $10.1 trillion in retirement assets — currently sitting in low-cost index funds that charge almost nothing — represents an enormous fee opportunity they’ve been locked out of until now.
Check your plan’s current default fund. If your employer has recently switched its target-date fund provider, find out what’s in the new one. And before anyone talks you into an “exciting new” retirement option, spend five minutes with “13 Bad Investments for Your Retirement.”
That’s how people actually become 401(k) millionaires — not by chasing whatever Wall Street is selling this year.
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