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Donald Trump is preparing to open the $9tn US retirement market to cryptocurrency investments, gold and private equity in a move that would spur a radical shift in the way Americans’ savings are managed.
Trump is expected to sign an executive order as soon as this week that would open up 401k plans to alternative investments beyond traditional stocks and bonds, according to three people who have been briefed on the president’s plans.
These investments would run a broad spectrum of asset classes, from digital assets to metals and funds focused on corporate takeovers, private loans and infrastructure deals.
The executive order would instruct Washington regulatory agencies to investigate the remaining hurdles needed to allow for such alternative investments to be included in professionally managed funds used by 401k savers, these people said.
“President Trump is committed to restoring prosperity for everyday Americans and safeguarding their economic future. No decisions should be deemed official, however, unless they come from President Trump himself,” the White House said in a statement to the Financial Times.
In the US, 401k plans are among the most popular ways working Americans save for retirement, allowing them to invest a portion of their salaries in publicly traded securities tax-free. But virtually all such investments are housed in public stock and bond mutual funds.
The executive order would accelerate Trump’s push to bring crypto investments to the mainstream, after his administration has dropped prominent enforcement actions against large digital asset-trading groups.
The House of Representatives on Thursday passed a trio of crypto-related bills that Trump has strongly backed, underscoring how the president is seeking to bolster the industry.
Trump campaigned on a platform of freeing cryptocurrencies from what he said were overly harsh regulations and credited the industry with helping him win the 2024 presidential election.
Trump’s family has also become a major cryptocurrency investor, striking a deal to purchase more than $2bn in digital currencies such as bitcoin through their publicly traded Trump Media & Technology Group, and launching a so-called stablecoin and other valuable digital tokens.
The Trump administration has already begun loosening rules surrounding the use of crypto for retirement accounts. The Department of Labor in May rescinded a Biden-era effort that discouraged administrators of 401k plans from including cryptocurrency investment options.
Beyond cryptocurrencies, Trump’s executive order will be helpful to the world’s largest private capital groups such as Blackstone, Apollo and BlackRock, which have all pinned much of their future growth on investing money on behalf of ordinary retirement savers.
It will ask the labour department to consider a safe harbour for administrators of retirement plans, which would minimise their legal risks as they embraced offering private investments to savers that carried higher fees and were not as easily valued or traded as public stocks.
Private capital groups such as Blackstone and Apollo predict that gaining access to 401k retirement plans could attract hundreds of billions of dollars in new industry assets, and they have begun striking partnerships with large asset managers.
Blackstone has struck a partnership with Vanguard, while Apollo and Partners Group are among firms that will offer investments to Empower, a large 401k plan sponsor. BlackRock has already begun working with Great Gray Trust, a third-party manger of retirement savings plans.
The opening of the 401k market to private equity comes as the industry has struggled to raise new money in recent years from institutional investors such as pensions and endowments. But the push to plough savings plans into less liquid private assets carries risks such as higher fees and overall leverage, in addition to less transparency on the valuation of fund assets.
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