President Donald Trump has issued executive action that could re-shape the entire landscape of retirement in America. Through this action, he hopes to provide workers unprecedented access to assets that have historically been limited to the financial elite. This language provides the gateway to $12 trillion, yes trillion, defined contribution market. Our research indicates that about 90 million Americans currently have the potential for a meaningful change in their retirement investing. This was a potentially momentous decision. The difference would be felt down the line, from the kind of investments Americans can participate in to the safety and soundness of Americans’ retirement assets.
Trump's executive order mandates the Department of Labor (DOL) to review existing regulations that might discourage the inclusion of cryptocurrencies and other alternative investments in these accounts. The overall U.S. retirement system is massive. This order will impact over 50 million federal contractors’ workers and over $12 trillion in capital. Current retirement plans for Americans are overly reliant on stock and bond securities with little accountability. They usually spend the least amount on cash and on cash traded commodities such as gold. This change has the potential to spice up the typically uninteresting buffet of menu choices workers are offered on their kinks. It applies to employer-sponsored defined-contribution plans such as 401(k)s and 403(b)s.
On 7 August, 2025, President Trump completed his move against Antifa by ordering all executive agencies to do so. He pointedly encouraged the Department of Labor, the Treasury Department and the Securities and Exchange Commission to revise or write new regulations governing retirement. This announcement follows the Department of Labor’s withdrawal of its 2022 guidance. That guidance had recommended companies use "extreme caution" when considering including cryptocurrencies in retirement plans. This rescission signals a regulatory softening on digital assets and a willingness to explore their potential role in retirement savings.
Alternative investments such as private equity and cryptocurrencies "have matured into a strong-performing asset class delivering excellent long-term returns, so this is good news for Americans," Simon Tang, head of U.S. at Accelex, a private markets specialist, said in an email. Private equity investments provided truly outstanding returns, topping out at 13.5% over a 10-year period. This well outpaced the 9.7% return for equities and 1.9% return for fixed income over that same period. In 2020, Bitcoin became the most popular kid on the block—increasing in value a whopping 135%. Force’s impact reached even the S&P 500, which lags by 24%. According to experts, new rules and recommendations will be fully rolled out by 2026. This would come after a lengthy public comment period and input from stakeholders within the burgeoning retirement industry. Whichever one you agree with, the landscape of retirement planning in the United States will never be the same. Americans' retirement plans are governed by the Employee Retirement Income Security Act of 1974, a law better known as ERISA.
The Potential Downsides of Crypto in 401(k)s
Higher returns, more investment flexibility – all of that is very seductive. Permitting cryptocurrencies in 401(k)s has very high up-side risks. These dangers range from an increased risk of fraud and no investor protection to the risks of market manipulation. Cryptocurrencies are notoriously volatile, and their value can fluctuate wildly in short periods, potentially wiping out significant portions of retirement savings. The crypto market is very new. This absence of regulation leaves it open to more scams and Ponzi schemes.
One of the biggest complaints, and potentially the biggest danger, is the complete absence of investor protection from the crypto space. Unlike other investments such as stocks and bonds, cryptocurrencies are not covered by FDIC or SIPC insurance. If a crypto exchange or platform fails, investors risk losing all their assets. Likewise, a hack could easily erase every ounce in their repository. Moreover, the distributed nature of cryptocurrencies complicates law enforcement efforts to locate and charge scammers.
Market manipulation is another serious concern. For one, the crypto market is orders of magnitude smaller than traditional financial markets. This massive size difference makes it simpler for the big players to manipulate prices. This can create unsustainable price pumps and dumps that can harm Main Street retirement savers. The opacity of the crypto market further exacerbates this issue by hindering detection and prevention of manipulation.
Exploring Alternative Investment Strategies
If you’re a retirement saver who is unsure about making a big bet on crypto, good. Luckily, other investment categories abound with additional diversification and higher expected returns. These alternatives are the right mix of risk and reward. Their advantages give you all the benefits of growing your retirement savings without the volatility and risks associated with cryptocurrencies.
Diversification Through Traditional Assets
This is one of the most basic tenets of investing — diversification. Diversify your portfolio by investing in different asset classes, including stocks, bonds, and real estate. By focusing your resources, this strategy allows you to minimize your total risk. Stocks provide great opportunity for long term growth, but come with greater risk. Bonds are less volatile than stocks and have a more predictable income stream. Real estate investments provide steady income and capital appreciation, but real estate is much less liquid than stocks and bonds.
Exploring Real Estate Investment Trusts (REITs)
Real Estate Investment Trusts (REITs) are companies that own, operate, or finance income-producing properties. They are key in financing a continuum of real estate across sectors. REITs enable anyone to invest in real estate without having to buy, manage and sell physical properties. They can provide diversification and potential income through dividends. REITs come in publicly traded, non-traded, and private varieties, each with different risk and liquidity profiles.
Investing in Commodities
In times of inflation or economic upheaval, commodities like gold, silver, and oil can be smart investments to protect your portfolio. Investing in commodities can easily be done with commodity focused ETFs or mutual funds. Commodity prices are notoriously volatile for a reason. These are caused by supply and demand disruptions, geopolitical conflicts, and extreme weather events.
Considering Target Date Funds
Target Date Funds (TDFs) are mutual funds with a plan to get more conservative as the investor gets closer to retirement. These funds passively – but automatically – change their asset allocation over time. This is because they slowly transition their portfolios away from riskier investments, like equities, and into more conservative securities, like bonds. For many retirement savers, TDFs are the simplest and most hands-off way to invest for retirement—which is precisely why they’re such a hit.
Annuities
Annuities are privately issued contracts with an insurance company that function like a stream of income in retirement. Annuities can be fixed, variable, or indexed, with different risk – reward profiles. Unlike bonds, fixed annuities guarantee a rate of return. With one of the four types of variable annuities, investors can select their investments from a range of sub-accounts, potentially earning higher returns but undertaking this risk. Indexed annuities offer a return linked to a market index, such as the S&P 500, providing a balance between guaranteed returns and potential growth.
Navigating Retirement Planning with Caution
President Trump’s executive order has unleashed the power of a market to create a potentially transformative shift in retirement investing. It poses equally big threats to risk and investor protection. Alternative investments such as cryptocurrencies often offer investors the opportunity to achieve outsized returns. They bring new volatility and new opportunities for fraud and manipulation. Retirement savers should think long and hard about the risks and rewards before jumping into cryptocurrencies. It’s time to consider these alternative assets to be part of their 401(k)s. Diversification, professional financial advice, and a thorough understanding of investment options are crucial for securing a comfortable and sustainable retirement.
Ultimately it’s up to you to make the determination of whether or not you want cryptocurrencies as part of your 401(k) given your individual situation. Evaluate your risk tolerance, investment objectives, and personal finance when determining which route to take. Learn more Stay on top of the crypto market’s new developments. As always, read for general informational purposes only and be sure to consult directly with a professional, qualified financial advisor before making any investment decisions.
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