Trump’s 401(k) changes leave retirees divided — here’s what they are really saying

Trump 401(k) changes: As US president Donald Trump moves to open up Americans’ 401(k) retirement plans to alternative assets like cryptocurrency, real estate, and private equity, many nearing retirement are far from convinced.

Nearly Half of Retirees Say No to Crypto and Private Equity in 401(k)s

A new survey from retirement planning platform Boldin reveals a deep divide among older Americans, with nearly half (48%) opposing the idea outright, as per a report. Only 34% supported it, while 18% said they felt neutral, according to Newsweek.

Despite the potential for higher returns, 80% said they were unlikely to invest any portion in alternative assets through their 401(k)s, and just 9.5% said they’d be “highly likely” to do so, as per the report.


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Why Financially Savvy Retirees Are Still Skeptical

The findings show that skepticism runs deep, even among financially savvy individuals. Boldin noted that most respondents were either “close to or already in retirement,” and 80% reported being at least somewhat familiar with alternative investments like crypto, private equity and real estate, according to the Newsweek report.

The Private Equity Stakeholder Project, a nonprofit watchdog focused on the private equity industry, explained that, "Unlike stocks, private equity funds don't trade on an exchange, so the value is based on what the fund says it's worth. That makes it easier to get wrong—and could lead to disputes or lawsuits from workers if they feel they didn't get a fair deal," as quoted in the report.

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The watchdog added, "Private equity funds usually charge much higher fees than index funds—sometimes multiple layers of them—and those fees add up over time, leaving you with less money at retirement," as quoted in the Newsweek report.

Boldin's survey found that 24% were strongly opposed to Trump’s proposal, while another 24% were somewhat opposed, according to the report.

Only a small portion said they might have considered such investments earlier in life, with 43% saying they would have limited exposure to just 5% of their portfolios, while 35% said they wouldn’t have touched them at all, as per Newsweek.

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What Trump’s 401(k) Order Means for Your Retirement Savings

This comes after Trump signed an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors,” on August 7, according to the report. The order directed the Secretary of Labor to review existing rules and issue clearer guidance for plan managers within 180 days, reported Newsweek.

Trump’s order says, "While more than 90 million Americans participate in employer-sponsored defined-contribution plans, the vast majority of these investors do not have the opportunity to participate, either directly or through their retirement plans, in the potential growth and diversification opportunities associated with alternative asset investments," as quoted in the report.

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FAQs

Are retirees in favor of the 401(k) change?
Not really. Nearly half (48%) of retirees surveyed oppose the idea, and only about a third support it, as per the Newsweek report.

Why are so many people against it?
Most people are worried about the risks, complexity, and higher fees tied to these kinds of investments.