Trump-Linked Proposal Could Bring Cryptocurrency and Private Equity to 401(k)s

A potential game-changer for retirement savings is on the horizon as the U.S. Department of Labor proposes allowing employers to include alternative investments in 401(k) plans.

The proposal, tied to an executive order from Donald Trump, aims to give everyday investors access to strategies used by wealthy individuals and institutional investors.

Alternative assets could be added to retirement portfolios, including private equity funds, real estate, commodities, and cryptocurrencies. However, critics warn that these investments can be complex, less liquid, and come with higher fees.

The Department of Labor has attempted to address concerns about fiduciary risk by proposing a 'safe harbor' framework for plan sponsors who follow a defined process when selecting investments.