Crypto & Private Equity in 401(k) Plans: Expert Advice Before You Invest

The world of retirement savings is changing fast.

While this could open doors to higher returns and more diverse portfolios, experts warn: don’t jump in without understanding the risks.

You might be missing out on benefits! Check what’s available to you here.

A New Era for Retirement Investing

In July 2025, President Trump ordered the Department of Labor and the SEC to draft new rules allowing 401(k) plans to include private-market assets.

These could include:

• Private equity funds

• Venture capital investments

• Hedge funds

• Real estate

• Cryptocurrencies like Bitcoin

Supporters say this change could help investors move beyond the traditional 60% stocks / 40% bonds approach, possibly shifting to a 50/30/20 mix with private assets making up 20%.

Larry Fink, CEO of BlackRock, supports the change, suggesting that private assets could boost long-term returns.

Why Experts Urge Caution

Lisa A.K. Kirchenbauer, financial advisor and CEO of Omega Wealth Management, says:

“If you don’t understand what you’re investing in, stick with traditional investments.”

Her biggest warnings:

• Liquidity issues – Private equity and some crypto investments are hard to sell quickly.

• Complexity – Understanding risks, fees, and structures is not easy for the average investor.

• Timing risks – Near-retirees may not have time to recover from losses.

Pro Tips for Adding Private Assets to Your 401(k)

If you want to explore private equity or crypto, here’s what experts recommend:

• Limit exposure – Keep it to 5–10% of your total portfolio.

• Do your homework – Learn how these investments work before committing.

• Check liquidity rules – Know how and when you can access your money.

• Work with a pro – Use an advisor who understands private-market investing.

Pension Funds vs. 401(k) Plans

Pension funds often use private equity to improve performance.

Larry Fink notes that pensions typically outperform 401(k)s by about 0.5% annually. Over decades, that adds up.

But pensions have full-time teams and resources to manage these complex assets, something most 401(k) plans and individual investors don’t have.

Bottom Line

The arrival of crypto and private equity in 401(k) plans could reshape retirement investing.

Potential gains are real but so are the risks.

Before diving in:

• Educate yourself

• Understand the rules

• Limit your risk exposure

When in doubt, consult a trusted financial professional to protect your long-term retirement goals.

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