Pumping the Brakes on Private Assets in Retirement Accounts

August 18, 2025

When you’re behind the wheel, momentum feels good. Windows down, open road ahead, the urge is to push a little harder on the gas. Any experienced driver knows the importance of pumping the brakes, checking your speed, watching for curves, and making sure the car is under control.  That’s a useful image for investors as Washington recently rolled out a new executive order opening the door to private assets (private equity, real estate, even crypto) in retirement accounts like 401(k)s.

On the surface, it feels like an acceleration: a bold move to give everyday savers access to investments once reserved for institutions. But before we floor it, it’s worth slowing down and looking at the road ahead.

What Changed?

The executive order doesn’t rewrite the law overnight. Instead, it directs regulators (Department of Labor and the SEC) to consider easing restrictions, clarifying fiduciary responsibilities, and even revisiting accredited investor rules.  This is not the first time Washington has nudged retirement policy in new directions. For example, past administrations introduced target-date funds, auto-enrollment, and qualified default investment alternatives before those ideas became mainstream. In the same way, today’s order sets the tone for a potential shift, but the rulemaking process with proposals, public comment, and revisions mean any changes could take months or even years to materialize.

Investors and plan sponsors don’t need to slam the brakes or hit the gas just yet; however, they should be aware of the traffic signal ahead. The administration indicated where it wants the flow of retirement savings to move, and that signal could eventually build new roads to a broader set of private market opportunities within 401(k)s and IRAs.

Why Tap the Brakes?

Market strategists have pointed out that private assets may offer diversification and potentially higher returns, but they also bring challenges:

• Illiquidity: Unlike mutual funds with daily liquidity, many private funds lock up money for years,
• Fees: Higher fee structures can eat into compounding,
• Opaque pricing: Valuations are often based on models, not transparent markets,
• Complexity: Many participants may not understand what’s under the hood,
• Risk: Greater volatility, leverage, and business risk than traditional public markets.

In other words, what may look like the passing lane could actually be a stretch of road filled with potholes. If these investments eventually make their way into retirement plans, they will most likely show up first as a small component within allocation funds like target-date strategies — meaning savers may have exposure even if they never select them directly.

Gauges and Guidance

Just as you keep an eye on your speedometer, retirement plans need to watch their gauges. Fiduciary duty under ERISA hasn’t changed, and education is essential before letting participants behind the wheel. Until those lights all turn green, it makes sense to ease off the accelerator.

For plan sponsors, that means focusing on process, due diligence, and understanding participant demographics before considering alternative investments.  At Security National Bank, our team helps plan sponsors navigate this process with careful due diligence and a focus on participant outcomes.  For savers, it’s a reminder that just because the road opens doesn’t mean every lane is the right one — a cautious, diversified approach still wins the race. For policymakers, the executive order creates momentum, but the real steering will come from clear rules and safe harbors yet to be written.

Closing Thoughts

Like any long trip, retirement investing is less about speed and more about reaching the destination safely. The executive order may hint at new routes ahead, but the journey will still require patience, discipline, and a steady hand on the wheel. Especially in a market where volatility and uncertainty remain high, the best course is to stay diversified, keep expectations realistic, and remember that sometimes pumping the brakes is what ensures you arrive where you want to go.

As always, if you have any questions about how this may impact your retirement strategy, please reach out to your advisor. Your financial success matters.