Retirement savers are eagerly anticipating the arrival of private asset investment options.
Nearly half of investors participating in 401(k) and similar workplace retirement savings plans say they would invest in private equity and private debt if their plan offered them, according to investment manager Schroders 2025 US Retirement Survey, which provided an exclusive first look at the report to Yahoo Finance.
“Demand for access to private markets is on the rise among Americans who participate in employer-sponsored defined-contribution plans,” Deb Boyden, Schroders’s head of US defined contribution, told Yahoo Finance.
Private assets, including private equity, venture capital, hedge funds, and real estate, are already legal in retirement accounts. However, plans have been slow to adopt them, and many workplace 401(k) administrators aren’t up to speed on them.
That’s where President Trump’s recent executive order comes into play. The directive instructs the Department of Labor and the Securities and Exchange Commission to draft guidance for defined-contribution plans to incorporate these types of investments.
The challenge will be finding the proper path to create investment options that can meet the fiduciary requirement plan providers must adhere to, such as acting solely in the interest of the participants and their beneficiaries.
Why are these retirement savers chomping at the bit? Nearly three-quarters say these investments will offer diversification and better returns.
In fact, they’re so hopeful for these new options that more than 3 in 4 say they would increase their paycheck contributions to their plan to fully take advantage of the opportunity.
While backers say the shift offers diversification from plain vanilla stocks and bonds and potential juiced-up returns over time, experts advise caution in adding private assets like crypto to 401(k)s.
Read more: Want to buy a house with crypto? What to expect.
Even though retirement savers champion the concept in theory, more than half (53%) think private assets sound risky, according to the report.
Their skepticism is healthy.
“While they may offer higher long-term returns compared to public markets, and some real estate and infrastructure assets may offer better protection against inflation, I am still not sure they are appropriate for regular lay people,” said Cary Carbonaro, a certified financial planner and the author of the new book “Women and Wealth.”
Private assets typically come with limited or no ability to sell early. And private funds often carry performance fees and other layers of costs far above what most mutual fund options charge.
