President Donald Trump is reportedly considering a sweeping executive order that would allow Americans to invest their 401(k) retirement savings into private markets — including hedge funds, real estate, private equity, and venture capital.
The move, first reported by The Wall Street Journal, would mark the biggest shift in retirement policy in decades.
The expected order will instruct the Labor Department to coordinate with the SEC to craft new guidance for employers and plan administrators.
If implemented, this would:
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Give 401(k) holders access to private investments not listed on stock exchanges.
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End the current limitations that restrict plans mostly to stocks and bonds.
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Allow Americans to grow their savings through higher-yielding, higher-risk options.
The U.S. 401(k) system currently holds about $12.5 trillion, the bulk of which has remained closed to private markets.
The Pros and the Risks
Trump allies and financial leaders are praising the proposal as a bold leap forward in giving working Americans more tools to build long-term wealth.
Bryan Corbett, president of the Managed Funds Association, said,
“Expanding access to alternative investments in 401(k) retirement plans will provide more Americans with the diversification and investment options needed to build wealth and save for successful retirement.”
However, the shift wouldn’t be without risks:
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Private investments carry far greater volatility than traditional options.
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Fees could be higher, cutting into retirement gains.
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Legal exposure for plan administrators is a concern if portfolios underperform.
A Return to Trump-Era Policy
The move would restore Trump’s earlier 2020 guidance, which allowed plan managers to include private equity. That rule was swiftly repealed by the Biden administration after taking office in 2021.
This new executive order would make it more durable and harder to reverse.
