Trump signs executive order, allows retirement money to be invested in private equity and cryptocurrencies through 401(k) accounts

Millions of Americans saving for retirement through 401(k) accounts could have the opportunity to invest their money in higher-risk private equity investments and cryptocurrencies, under an executive order signed Thursday by President Donald Trump that could give these financial players long-sought access to a pool of funds worth trillions.

There is no immediate change in how people invest a portion of their earnings from work. Federal agencies would have to rewrite rules and regulations to allow for the expanded choices, and that would take months or more to complete. But once that is done, employers could offer workers a wider range of mutual funds and investments, according to the White House. The new plans could invest in alternative assets, particularly private equity, cryptocurrencies and real estate.

The president's order directs the Department of Labor and other agencies to redefine what would be considered a qualified asset under 401(k) retirement rules.

Americans' retirement plans are governed by a law known as the Employee Retirement Income Security Act of 1974, better known as ERISA. Employers are required by law to offer retirement options that are in the best interest of their employees, not Wall Street. Most retirement plans for Americans consist of investments in stocks and bonds, and to a much lesser extent, cash and heavily traded commodities like gold.

Trump's move rewards both the $5 trillion private equity industry, which for decades has wanted to compete for a role in retirement plans, and the cryptocurrency industry, whose leaders strongly supported Trump's 2024 campaign as they aimed for broader acceptance among Americans.

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