NerdWallet: “Private Equity in 401(k) Plans: Is It Risky?”
NerdWallet, Sept. 3, 2025 — In today’s article Sam Taube he explains: “Last month, President Donald Trump signed Executive Order #14330, “Democratizing Access to Alternative Assets for 401(k) Investors.” The order seeks to open up 401(k) plans to a variety of investments that are not available in conventional stock or bond funds, such as private loans, crypto, real estate and private equity. You may have heard of private equity before — but what exactly is it, and is investing your 401(k) in it a good idea?”
In his breakdown, he interviews Marguerita Cheng, a certified financial planner and the CEO of registered investment advisor Blue Ocean Global Wealth, who said private equity may provide 401(k) investors with better returns and more diversification.
However, she noted that PE funds charge high fees (we found that’s typically a 2% management fee, and 20% of the fund’s profits), and that retail investors may not be well-informed about how these funds work. “Investor education is a concern, as we don’t want people to approach 401(k) investing with a short-term view,” Rita said.
She adds: Private equity isn’t available in 401(k) plans yet. It’s also generally only available to accredited investors (people who have a net worth of at least $1 million excluding their primary residence, an annual individual income of at least $200,000, or certain financial professional licenses). But if you’re interested in taking private equity for a “test drive” before it becomes available in 401(k) plans, there are already some workarounds to the accredited investor rule.