Money For the Rest of Us Should Private Assets, Gold, and Crypto Be Investment Options in 401k and other Defined Contribution Plans?
Jul 23, 2025
A recent executive order could transform retirement investing by allowing private equity, crypto, and gold in 401(k) plans. The push for alternative assets is on the rise, but it brings risks for everyday investors. The podcast discusses the hurdles facing private equity in today's market and the illiquidity crisis complicating retirement planning. It also emphasizes the critical need for financial literacy and thoughtful evaluation of self-directed options for those considering these complex asset classes.
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Private Equity in 401(k) Plans
- Legal fears prevent companies from including private equity in 401(k)s despite no federal prohibition.
- Diversified target date funds can prudently include private equity as part of their portfolios.
Illiquidity in Private Capital
- Private capital investments have long horizons and significant illiquidity.
- Illiquidity premium compensates investors for returning capital over many years, typically 15 or more.
Financial Literacy Challenges
- Many 401(k) investors lack financial literacy about fees, compounding interest, and diversification.
- Most don't understand basic stock and bond investing, complicating their ability to handle alternative assets.