Trump signs executive order expanding 401(k) options, including crypto

President Donald Trump signed an executive order aimed at expanding investment options for 401(k) retirement plans to include alternative assets like cryptocurrency and private equity.

This order directs the Department of Labor, the Securities and Exchange Commission, and the Department of the Treasury to review and revise existing regulations and guidance that have historically limited such investments. The goal is to provide greater access to a broader range of assets for American workers, similar to those available to wealthy investors and government pension funds.

The executive order follows a previous move by the Department of Labor in May to rescind guidance from the previous administration that had cautioned fiduciaries against including cryptocurrency in 401(k) plans.

President Donald Trump signed an executive order aimed at expanding investment options for 401(k) retirement plans to include alternative assets like cryptocurrency and private equity.

This order directs the Department of Labor, the Securities and Exchange Commission, and the Department of the Treasury to review and revise existing regulations and guidance that have historically limited such investments. The goal is to provide greater access to a broader range of assets for American workers, similar to those available to wealthy investors and government pension funds.

The executive order follows a previous move by the Department of Labor in May to rescind guidance from the previous administration that had cautioned fiduciaries against including cryptocurrency in 401(k) plans.

The new order is not an immediate change, and it will likely take several months for federal agencies to create and implement new rules. After that, retirement plan providers like Fidelity and Vanguard would need time to develop new products, and employers would need to update their plan offerings. Consequently, it may be years before these alternative investments become widely available in individual 401(k)s.

While proponents argue that alternative assets offer the potential for higher returns and greater diversification, critics and some financial experts have raised concerns about the risks, including increased volatility, higher fees, and a lack of transparency associated with assets like cryptocurrency and private equity.

The new order is not an immediate change, and it will likely take several months for federal agencies to create and implement new rules. After that, retirement plan providers like Fidelity and Vanguard would need time to develop new products, and employers would need to update their plan offerings. Consequently, it may be years before these alternative investments become widely available in individual 401(k)s.

While proponents argue that alternative assets offer the potential for higher returns and greater diversification, critics and some financial experts have raised concerns about the risks, including increased volatility, higher fees, and a lack of transparency associated with assets like cryptocurrency and private equity.