President Donald Trump changed the rules for retirement investing Thursday, giving commercial real estate firms access to a $12T capital market.
Trump signed an executive order explicitly stating that 401(k) retirement accounts could hold private equity, real estate, cryptocurrency and other alternative assets.
An executive order is set to make it easier for 401(k) managers to invest in real estate.
The White House framed the executive order as necessary to combat burdensome regulations and litigation that was preventing American’s from having access to the best investment options.
“My Administration will relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement,” the executive order states.
The executive order was first reported by Bloomberg but had been rumored since mid-July.
Money managers looking to tap into Americans’ retirement accounts have long lobbied for the change as they look for access to new cash sources.
The order gives the Labor Department 180 days to reevaluate its guidance surrounding alternative asset investments by 401(k)s and other defined contribution plans It directs the Department of Labor to clarify the government’s position on the fiduciary responsibilities associated with giving retirement planners access to alternative assets to pitch to clients.
“Such clarification must aim to identify the criteria that fiduciaries should use to prudently balance potentially higher expenses against the objectives of seeking greater long-term net returns and broader diversification of investments,” the order states.
Retirement funds have historically been concentrated in stocks and bonds, both because of government regulation and the more illiquid structure of many alternative asset investments.
Trump eased the way for alternative assets into retirement accounts during his first term through a Labor Department directive that welcomed private equity investment into retirement accounts.
Then-President Joe Biden warned 401(k) managers away from cryptocurrency in 2022, telling them to “exercise extreme care” when considering digital coins as an investment option. The Trump administration rescinded that directive in May.
Two weeks prior to the White House reversing the Biden-era directive, Apollo Global Management announced that some of its 401(k) accounts would include private market investments. BlackRock announced in June that it would launch a 401(k) in the first half of 2026 that would include an up to 20% allocation into private investments.
Labor Secretary Lori Chavez-DeRemer is directed by the executive order work with the heads of the Treasury Department, Securities and Exchange Commission and other federal regulators to identify any rules changes needed to smooth the process.
The private equity industry has long lobbied for the change, but it more recently found an ally in cryptocurrency boosters, who have been pushing the Trump administration to integrate the tech into the financial system.
Trump marketed himself to voters as a cryptocurrency advocate and has made moves to formalize digital tokens and increase investment in the space. Trump and his family own multiple cryptocurrency ventures.
Bitcoin climbed more than 1% to more than $116K on the news Thursday morning.
UPDATE, AUG. 7, 4:40 P.M. ET: This story has been updated to include details from the executive order.
