Trump’s 401(k) Gamble Puts Black Retirement Security at Risk

August 15, 2025

President Trump's executive order is directing the Labor Department to rewrite rules within 180 days to make alternative investments like private equity, cryptocurrency, and real estate standard options in 401(k) retirement plans. The policy change could give Wall Street access to a portion of the $12. 2 trillion in U.S. retirement savings, but critics warn it shifts substantial risk to workers, particularly those without significant wealth or investment experience.

Who is affected

Black Americans, particularly those invested in 401(k) plans
Approximately 35% of American adults who use 401(k) plans
Federal workforce employees, where Black Americans make up nearly 20%
Workers without substantial wealth or investment experience
Extended family members supported by Black households

What action is being taken

Trump is pushing an executive order directing the Labor Department to rewrite rules within 180 days
The Securities and Exchange Commission is being instructed to find ways to increase access to alternative investments
The initiative is opening 401(k) retirement plans to high-risk assets including private equity, cryptocurrency, and real estate

Why it matters

The change could shift significant financial risk to workers, especially those without investment experience
Alternative investments typically charge much higher fees (1-2% management fees plus up to 20% performance fees compared to 0.3% for traditional funds)
Cryptocurrencies lack FDIC protection that traditional bank accounts have
Black households already face barriers to wealth accumulation, including less stock market exposure and homeownership obstacles
The policy coincides with threats to federal jobs that have historically provided stable employment and reliable retirement benefits to Black Americans

What's next

No explicit next steps stated in the article

Read full article from source: The Washington Informer