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

Sometimes, changes in laws, tax policies, and even economic instability can affect 401(k) retirement plans directly or indirectly. During President Trump's first term, his administration changed taxes, fiduciary rules, and other regulatory requirements. These past rulings can give American workers a glimpse of some possible changes on the horizon.

Here are some of the 2026 updates to 401(k)s that have already taken place, along with some upcoming changes the Trump administration proposed. If you're an employee with a 401(k) plan, you need to know about these changes, especially if you plan to retire in the next few years.

2026 updated contribution limits

A positive change to 401(k)s at the start of 2026 is that the IRS increased contribution limits. Now, workers can contribute up to $24,500 annually to their 401(k)s. Those age 50 and older get an additional bump, as they can make $8,000 in catch-up contributions in addition to the $24,500 maximum.

The catch-up contribution limit for age 60-63 remains unchanged from 2025. Those workers can contribute an extra $11,250 in 2026.

Tax changes for high earners

If you make at least $150,000 a year, another big change you should know about affects your taxes. As of 2026, those who earned $150,000 or more in FICA-taxable wages the previous year must put their catch-up contributions into a Roth account rather than a traditional 401(k).

That means high earners won't be able to reduce their taxable income with 401(k) catch-up contributions as in previous years. However, there are some other benefits, like being able to withdraw Roth contributions tax-free in retirement (as long as you meet certain qualifications).

Alternative investments in 401(k)s

The Trump administration has taken steps to make it easier for 401(k) plans to consider alternative investments, including private equity, real estate, commodities, infrastructure investments, and funds that invest in digital assets.

In August 2025, President Trump signed an executive order directing the Department of Labor (DOL) to review its guidance on alternative investments in 401(k) and other defined-contribution retirement plans. The order also directed federal regulators to consider ways to expand access to alternative investments while maintaining fiduciary protections for retirement savers.

The DOL followed up in March 2026 by proposing a rule that would provide a framework for plan fiduciaries to evaluate alternative investments. Under the proposal, fiduciaries would consider factors such as investment performance, fees, liquidity, valuation, benchmarks, and complexity when deciding whether to add an investment option to a plan.

That doesn't mean every 401(k) can now invest in cryptocurrency or other alternative assets. The proposal does not require employers to offer these investments, and your plan's investment menu is still determined by your employer and plan fiduciaries.

For retirement savers, the changes could eventually mean more investment choices. But alternative investments can also involve higher fees, limited liquidity, valuation challenges, and additional risks. Plan fiduciaries still have a responsibility under federal retirement law to follow a prudent process when selecting investment options.

If your 401(k) doesn't currently offer cryptocurrency or other alternative investments, these changes don't necessarily mean they'll be added to your plan. The impact will depend on how the new rules develop and whether your plan's fiduciaries decide that offering alternative investments is appropriate for participants.

Changes in fiduciary rules and more deregulation

During the first Trump administration, President Trump issued orders promoting deregulation, aiming to reduce red tape and compliance requirements in numerous areas. While these efforts didn't directly overhaul 401(k) plans, some critics argued they could indirectly affect retirement-plan oversight and fiduciary protections.

Because President Trump pursued these policies during his first term, some analysts expect 2026 could bring additional deregulation affecting retirement plans. The Brookings Institution maintains a lengthy tracking tool outlining regulatory changes made by presidential administrations, should you want to stay up to date on any proposed changes.

Market volatility

The market has been volatile during President Trump's second term, in part because of changing tariff policies. When policies change quickly, it can create market uncertainty, causing many workers to worry about drops in their 401(k) balances.

American workers could continue to see balance fluctuations in their 401(k)s in 2026, as many decisions regarding foreign policy and tariffs are still ongoing. If you get anxious when your retirement balances fluctuate, it's a good idea to consult a financial advisor who can work with you on your retirement goals.

What isn't changing with 401(k)s

Even though there have been proposed changes to 401(k)s, some aspects of contributing to these retirement plans will remain the same. You will still receive tax advantages from contributing to a 401(k). Many employers across the country will continue to offer matching contributions.

Although seeing news about 401(k) updates might increase uncertainty, the plans themselves will remain available for the foreseeable future.

How to stay informed and ask for help

The best way to stay up to date about 401(k) changes is to read every email your employer sends you about your 401(k) plan. If you have questions about plan updates, contribution rates, or your employer match, ask your Human Resources department.

If you're new to investing or want expert advice when choosing funds, it's always wise to work with a financial advisor and an accountant. These professionals can help ensure you're on track for retirement and maximizing your tax strategy.

Bottom line

The Trump Administration is considering some changes that could affect your 401(k) offerings, namely when it comes to the types of assets you can purchase within it. There have also been updates to contribution limits and tax rules for 2026 catch-up contributions. Staying up to date on these changes and asking a professional for help if you need it is the best way to prepare yourself financially and ensure you're able to retire comfortably in the future.

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