August 7, 2025
5 min read
DOC LOUALLEN
Trump's executive order allows 401(k) investments in crypto, private equity, and real estate, raising new risks and opportunities for retirement savings.
Major 401(k) Changes: What to Know About Trump's New Crypto and Private Equity Rules
President Donald Trump signed an executive order on August 7, 2025, allowing Americans to invest their 401(k) retirement savings in cryptocurrency, private equity, and real estate. This marks a significant shift in retirement investment options by expanding access to alternative assets. The order instructs the Securities and Exchange Commission (SEC), Labor Department, and Treasury to update their rules to facilitate investor access to these new asset classes. While this change could open a vast new pool of retirement money for alternative asset managers, some experts warn it may expose retirement savings to higher risk and increased market volatility. Traders on the New York Stock Exchange reacted to the announcement, reflecting the broader market's adjustment to these policy changes."It's going to be slow going," said Ted Rossman, senior industry analyst at Bankrate. "A lot of providers are reluctant to be early adopters here. They're worried about potential costs and maybe lawsuits or other consequences."Rossman noted that although some private investments were permitted in retirement accounts starting in 2020, they remain uncommon and not widely accessible.
"If you want to have a small part of your portfolio in crypto, that could make sense," Rossman advised. "Generally speaking, index funds are the best way to go for the average person. Just kind of keep it simple, match the market over time, get low fees."Vanguard, one of the largest retirement plan providers, commented that private assets could offer broader diversification and potentially higher returns for investors with the right risk tolerance and long-term outlook. However, Vanguard emphasized the importance of educating retirement investors to ensure they clearly understand both the opportunities and risks involved in investing in private assets. On the same day as the crypto announcement, Trump unveiled sweeping new trade tariffs affecting more than 90 trading partners. These tariffs range from 15% to 41%, with most imported goods facing at least a 10% tax. Additional tariffs were threatened on specific products such as pharmaceuticals, lumber, and semiconductors. Retailers have so far absorbed most tariff increases without passing costs to consumers, but the National Retail Federation warned this could force stores to cut back on employee investments and growth plans if the trend continues. The combined impact of these policy changes is prompting both the investment and retail sectors to adjust to a new economic landscape, with further changes possibly on the horizon.
Originally published at ABC News on August 7, 2025.