Donald Trump’s Order On Investing For Retirement: What Does It Change | Explained
US President Donald Trump’s executive order lets 401(k) plans invest in private equity, real estate and crypto, raising both opportunities and risks for retirement savers.

US President Donald Trump’s recent executive order promises to alter the landscape of retirement savings in the country. Signed on Aug. 7, the order aims to expand the investment options available to 401(k) plans by allowing them to include alternative assets such as private equity, real estate and cryptocurrencies. But what exactly does this mean for American workers?
What Is The Essence Of Trump’s Executive Order On 401(k) Plans?
According to the White House, the order directs the Securities and Exchange Commission (SEC), the Labour Department and the Treasury to revise their regulations to permit 401(k) plans to invest in assets previously off-limits. These include private equity, real estate and digital currencies like Bitcoin and Ethereum, according to ABC News.
This marks a shift from traditional retirement plan investments, which have largely been limited to stocks and bonds. Bloomberg describes this as the biggest move yet by the Trump administration to open defined-contribution accounts to private assets.
Why Is This Significant?
Currently, more than 90 million Americans participate in employer-sponsored defined-contribution plans, most of which restrict investments in alternative assets, stated the White House.
Wealthy investors and government retirement plans have traditionally enjoyed access to these asset classes, which offer competitive returns and diversification benefits. By expanding access, President Trump aims to provide ordinary workers with a chance for stronger and more financially secure retirements, said the White House.
What Rules Are Changing, And What Is Staying The Same?
The executive order targets outdated rules that have long blocked retirement plans from investing in these higher-growth but higher-risk assets. But the underlying law governing retirement accounts, the Employee Retirement Income Security Act (ERISA), isn’t changing, The reports New York Times.
ERISA mandates fiduciaries, who are employers or plan administrators, to act solely in the best interests of employees, selecting prudent investments, states the NYT report.
This means that despite the new order, plan administrators will still need to carefully evaluate whether including volatile assets such as cryptocurrencies is appropriate for their participants.
What Are The Potential Risks And Rewards?
Alternative assets could open the door to higher returns, thereby reshaping how Americans save for retirement. But these come with a lot of risk, especially with cryptocurrencies, which remain speculative and have been linked to fraud, stated a report in The Guardian.
While cryptocurrencies are becoming more accessible through investment vehicles like exchange-traded funds, they are still rare in retirement plan offerings. Private equity investments are also limited but are slowly being introduced by companies like BlackRock, which plans to launch target-date funds including these assets, the NYT report states.
How Does This Fit Into The Broader Context Of The Trump Administration’s Stance On Cryptocurrencies?
The executive order is part of a wider push by the Trump administration to embrace cryptocurrencies and ease regulations on digital currencies. Although in the past Trump had called Bitcoin a “scam,” this year he launched his own cryptocurrency enterprise and has vowed to make the US the “crypto capital of the world,” according to The Guardian report.
What Happens Next?
The order calls on the SEC, Labour Department and Treasury to update their rules, paving the way for these changes to take effect. This could mean that ordinary American retirement savers will soon gain access to investment options that were once exclusive to the wealthy or institutional investors.