Trump clears path for crypto and private equity in your 401(k)

President Trump signed a landmark executive order on August 8th that could fundamentally transform American retirement investing by opening 401(k) plans to alternative investments including private equity, cryptocurrency, and real estate. The order directs the Department of Labor to reexamine guidance that has traditionally kept these sophisticated investments away from workplace retirement plans, potentially giving millions of workers access to asset classes previously reserved for wealthy investors and institutions. This represents the most significant potential change to the $12.2 trillion retirement plan market in decades.

The move aims to “democratize” access to alternative investments that have historically delivered strong returns for pension funds and high-net-worth individuals. Private equity firms typically charge 2% management fees plus 20% of profits, while crypto offers both high growth potential and significant volatility. Supporters argue these investments could provide better diversification and higher long-term returns than traditional stock and bond portfolios. The executive order specifically seeks to “relieve regulatory burdens and litigation risk” for employers who might offer such options to their workers.

Despite the promising nature of these changes, they come with significant caveats and won’t take effect right away. Employers would still need to decide whether to offer these investments, and many may hesitate due to complexity, higher costs, and fiduciary responsibilities. Financial advisors are divided—some see opportunities for enhanced returns and diversification, while others worry about unsophisticated investors taking on inappropriate risks. The Department of Labor has 180 days to provide new guidance, and it could take years before these options become widely available. For now, retirement savers should focus on understanding their current options while staying informed about these potentially game-changing developments.

No crisis after all? Why Americans might be more prepared for retirement than you think

Despite widespread fears about a looming retirement crisis, new analysis suggests Americans may be far better prepared for their golden years than alarming headlines suggest. Andrew Biggs, author of “The Real Retirement Crisis” and senior fellow at the American Enterprise Institute, argues that when you examine actual data on retirement savings, income, and participation rates, “the retirement crisis narrative falls apart very quickly.” His research, based on sophisticated Social Security Administration models, shows that future replacement rates for typical retirees will be about the same as today’s levels.

The data reveals a striking perception gap between retirement fears and reality. While 60% of Americans believe the nation faces a retirement crisis, only 4% of actual retirees describe their own finances as a crisis, according to Vanguard surveys. Federal Reserve data shows just 5% of current retirees say they are truly struggling financially, while Gallup finds that 80% of current retirees report having enough money to live comfortably—compared to only 60% of working-age adults who believe they’ll be financially secure in retirement. This suggests many people worry more about retirement than they ultimately need to.

Much of the confusion stems from inaccurate statistics that overstate the retirement savings problem. Biggs notes that while surveys often report that “nearly half of Americans approaching retirement have no savings,” these numbers are “simply wrong.” Bureau of Labor Statistics data shows 72% of private-sector employees are offered retirement plans, with Social Security Administration research revealing that when survey responses are matched against tax data, participation rates jump from 50% to 62%. Additionally, 88% of Americans approaching retirement actually have some form of retirement savings, and even those without formal plans often achieve 90% income replacement through Social Security and other sources. For middle and higher-income earners concerned about Social Security’s future, Biggs recommends saving an extra 1-2 percentage points annually in 401(k)s as insurance against potential benefit reductions.

Social Security cost-of-living adjustment may be 2.5% in 2026, new estimates find

Early projections suggest Social Security beneficiaries may receive another 2.5% cost-of-living adjustment in 2026, matching this year’s increase and providing continued protection against inflation. The Senior Citizens League and independent policy analysts are forecasting this boost based on recent government inflation data, though the official announcement won’t come until October. If the projection holds, the average retiree benefit would rise from $1,968 in 2025 to approximately $2,021 in 2026—an increase of about $53 per month.

The projected COLA reflects moderating but persistent inflation pressures across the economy. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—the specific measure used for Social Security calculations—rose 2.2% over the past 12 months through May 2025. However, advocacy groups note a concerning disconnect: while the official inflation measure suggests modest price increases, 80% of seniors in surveys report feeling that inflation exceeded 3% based on their actual expenses, particularly for healthcare and housing.

This highlights an ongoing challenge with COLA calculations that has significant implications for retirees’ purchasing power. The Senior Citizens League estimates that Social Security benefits have lost 40% of their buying power since 2000, partly because the CPI-W may not accurately reflect costs faced by retirees. Medical care and housing expenses—major budget items for seniors—appear underweighted in the formula. President Trump’s tariff policies could also influence future inflation trends, potentially pushing the 2026 COLA higher if import costs rise significantly. For current and future retirees, these projections underscore the importance of not relying solely on Social Security for retirement income security.