WASHINGTON – President Donald Trump has signed an executive order that could transform how millions of Americans save for retirement. The order, which was signed on Thursday, tells the Department of Labor and other federal agencies to change the definition of what counts as a retirement investment under the Employee Retirement Income Security Act of 1974 (ERISA). If the rules are changed as planned, Americans may soon be able to put some of their 401(k) funds into riskier alternative assets like private equity and cryptocurrency.
This modification doesn’t impact how people invest their money right away. It could take months or possibly years to rewrite government rules and regulations. But once it’s done, it would let employers give their employees more investing choices than just stocks, bonds, and cash.
Private equity firms, which have long wanted access to the trillions of funds in American retirement accounts, regard this regulatory change as a big triumph for their $5 trillion business. It is also a big win for the Bitcoin business, whose leaders were big backers of Trump’s 2024 presidential campaign and have been pushing for more general adoption.
Pros and Cons of Alternative Investments
This move is different from what the last government did and what has happened in the past. Federal regulators told people in charge of retirement plans to be “extremely careful” with cryptocurrency investments because they are known to be quite unstable. It is not unusual for big cryptocurrencies like Bitcoin to change in price by 10% or more every day. This type of volatility is not common in the stock market. After the announcement, the price of Bitcoin went up by 2% to $116,542. This is almost double what it was worth before Trump was elected.
People who support the shift, including Cory Klippsten, CEO of Swan Bitcoin, say that “it was inevitable that bitcoin would make its way into American 401(k)’s.”” He thinks that as fiduciaries see the long-term, risk-adjusted benefits of Bitcoin, more people will invest in it, especially younger, “tech-savvy” workers who want tangible money.
Critics, on the other hand, say that these other types of investments, especially private equity, are hard to sell, not as clear, and have greater fees than regular mutual funds. The change also makes people worry about companies’ duty to offer investing options that are “in the best interest of their employees, not Wall Street.”
What 401(k)s Are Like Now
More than 60 million people were actively participating in 401(k) plans as of early 2025, and the total value of all the assets was more than $9.3 trillion. About six out of ten Americans have some kind of retirement assets, including a 401(k), 403(b), or IRA. But there are significant differences in how much people save for retirement based on their demographics:
68% of non-Hispanic White adults have a retirement savings plan, but only 42% of people of color do.
Education: 81% of people who have graduated from college have a retirement plan, whereas only 39% of adults who have not graduated from college have.
Age: The percentage of people saving for retirement goes up with age, from 39% of those aged 18 to 29 to 70% of people aged 50 to 64.
Income: 83% of persons who make $100,000 or more have a plan for retirement.
firms like Vanguard have said they want to teach investors about the risks and rewards of private assets. However, it will likely take retirement plan firms and employers a few years to come up with and put into place new funds for these types of investments.