Alternative Investments Hit 401(k)s and Retirement Tax Planning
Aug 8, 2025
Alternative investments are making their way into 401(k) plans, raising questions about their benefits and risks for everyday investors. The discussion highlights concerns about transparency and high costs associated with these options. As retirement approaches, the tax burden shifts, creating unique planning opportunities. Strategies like Roth conversion and tax-efficient charitable giving are explored. Additionally, emerging trends in AI and the stabilization of tariffs are shaping market dynamics and investment strategies.
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insights INSIGHT
Alternatives Lose Exclusivity, Quality Matters
Alternatives coming to 401(k)s remove exclusivity but raise quality concerns.
Access alone doesn't guarantee high-quality private deals will be offered to Main Street.
insights INSIGHT
Menu Selection Determines Outcome
The critical question is which alternative funds will be included in 401(k) menus.
High fees and poor wrappers could make alternatives replicate public market returns at higher cost.
insights INSIGHT
Private Alts Mask Volatility
Private investments hide volatility because they aren't mark-to-market daily.
Lack of price transparency can mislead investors about true risk and drawdowns.
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Alternative investments are coming to 401(k) plans for the first time. Is this great news for regular investors or a recipe for disaster?
Andy and Adam debate whether Main Street should get excited about accessing private equity and private credit, or whether these investments will just be expensive versions of what people already have.
Plus, Adam walks through why retirement completely changes your tax situation. When paychecks stop, the entire tax burden shifts back to you. But that actually creates some incredible planning opportunities.
We cover:
Why alternative investments in 401(k)s could be great or terrible
The quality problem with mainstream alternative investments
How retirement shifts your entire tax burden back to you
The different tax treatments of your retirement account buckets
Roth conversion strategies when your income drops
Pairing charitable giving with tax planning moves
Why the AI trade is back and tariff fatigue has set in
⏱️ Timestamps:
(00:00) Alternative investments coming to 401(k) plans
(02:50) The exclusivity problem and quality concerns
(05:50) Lack of transparency and guardrails in private investments
(08:30) How retirement changes your entire tax situation
(10:00) The three buckets of retirement money and tax treatment
(13:40) Why most people's tax rates drop in retirement
(15:55) 3 surprises in the tax and retirement planning process
(17:30) Roth conversion arbitrage in low-income years
(22:00) Pairing charitable giving with tax moves
(23:30) What's exciting about the second half of 2025
(25:30) Why the market didn't react to final tariff announcement
The Burney Company is an SEC-registered investment adviser. Burney Wealth Management is a division of the Burney Company. Registration with the SEC or any state securities authority does not imply that Burney Company or any of its principals or employees possesses a particular level of skill or training in the investment advisory business or any other business. This content is for informational and educational purposes only. It is not intended as personalized investment advice or a recommendation.
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