Retirement Retirement Planning

401(k) Rules Are Changing Under Trump - And People in Their 60s May Not Like What's Happening

A quiet shift could change investment risks for retirees.

By Adam Palasciano , Edited by Laura Hohenstein

Updated July 30, 2026

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For workers in their 60s, a 401(k) is often less about finding the next big winner and more about protecting money they may soon need. That's why a federal push to broaden workplace investment choices could complicate a carefully constructed retirement plan. The change isn't final, but it may affect the fees, liquidity, and risk hiding inside funds that may look familiar — what sounds like more choice may require much closer attention.

President Donald Trump's August 7, 2025, executive order directed the Department of Labor to make it easier for 401(k) plans to offer alternative assets. The order covered private equity, private credit, real estate, digital assets, commodities, infrastructure development, and certain lifetime-income strategies.

The Labor Department followed on March 30, 2026, with a proposed rule establishing process-based "safe harbors" for plan sponsors that follow specified steps when selecting investments. The proposal is not final, and its public comment period closed on June 1, 2026, according to the Federal Register notice.

That leaves older workers with time before retirement to understand what could be coming.

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The safe harbor could encourage more plans to add alternatives

Employers already have the authority to consider some alternative investments, but many have stayed away because of legal, operational, and fiduciary concerns. The proposal would give plan sponsors a clearer defense against lawsuits if they objectively evaluate performance, fees, liquidity, valuation methods, benchmarks, and complexity before adding an investment.

It doesn't require employers to offer private equity or cryptocurrency, but reducing litigation risk could make providers and plan committees more willing to introduce them. The Labor Department expects target-date funds to be the main route, which matters because many employees already use those funds or were placed in them automatically.

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Higher costs and limited access may hit older savers harder

Alternative assets can behave very differently from the low-cost stock and bond funds common in 401(k) plans. Holdings that don't trade publicly can also be harder to value and more illiquid, which can make money less accessible when investors want cash.

Those trade-offs become more serious near retirement because a 35-year-old may have decades to wait out a weak period, while someone in their 60s may need funds for living expenses, taxes, home repairs, or medical bills within a few years. It's noted that more recent private-equity funds have shown little or no excess return over public markets, raising questions about whether higher costs reliably produce better results.

It's questionable whether the protections will go far enough

Broader access could improve diversification and give ordinary workers investment opportunities that have long been available to pension funds and wealthy households. On the other hand, the safe harbor rule may speed complex products into workplace plans before employers, advisors, and workers fully understand the fees, valuation methods, conflicts, and liquidity limits.

The CFA Institute has warned that individual savers may not receive the same low fees, manager access, or favorable terms that large institutions can negotiate. The proposal requires sponsors to select meaningful performance benchmarks, but private-market options can be harder to compare because accepted benchmarks, daily prices, and consistent disclosures may be limited.

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Bottom line

People in their 60s aren't being required by the federal proposal to buy alternative assets, and the rule would not automatically replace every traditional 401(k) option. However, private equity, private credit, real estate, or crypto exposure could eventually appear inside target-date or managed funds, including funds used as plan defaults, so review the prospectus, expense ratio, withdrawal rules, holdings, and target-date before assuming the fund's name tells the whole story.

Would accepting more complexity meaningfully improve your retirement outlook, or would keeping costs, liquidity, and risk easier to understand help lower your financial stress? As the rule develops, the practical move is to know what you own, understand how quickly you can access it, and make sure your portfolio still fits your financial goals for the years immediately ahead.

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