For decades, everyday Americans have had easy access to public stock markets but have been largely locked out of private investments. That imbalance has limited growth potential for millions of workers and retirees. Now, the Trump administration is taking steps that could change that – and potentially change the retirement prospects of millions of Americans for the better.
These efforts are outlined in Chapter 12 of the latest Economic Report of the President (ERP), which AMAC Newsline received exclusive access to prior to its release on Monday. To understand why this matters, it helps to start with the basics.
Public investments – like stocks you can buy on the New York Stock Exchange – are widely accessible. Private investments, by contrast, include ownership stakes in companies that are not publicly traded. These stakes are often purchased through private equity or venture capital funds.
In short, private investments have historically been reserved for wealthy individuals and large institutions. But as the ERP explains, that divide has come at a cost for everyday Americans.
The financial world has shifted dramatically since the turn of the century. The number of public companies in the U.S. has dropped by more than half – from 8,800 in 1997 to just 4,000 today – while the number of private companies has surged from 20 million to roughly 35 million. At the same time, private investment funds have exploded in size, growing from $9.5 trillion in assets in 2012 to more than $30 trillion in 2024.
That means a growing share of America’s economic growth is happening outside of public markets – leaving most retirement investors stuck.
The ERP is blunt about the consequences: “Millions of Americans have been deprived of the growth opportunities and diversification benefits of private markets through their DC retirement plans.”
A defined contribution (DC) retirement plan – like a 401(k) or IRA – is a savings account where workers contribute a portion of their income and invest it for retirement, often with help from employer matching contributions. Today, these plans are the primary retirement vehicle for millions of Americans, putting individuals in charge of their own financial future.
As a result, missed opportunities in DC plans are significant. According to the ERP, private equity investments have “consistently outperformed the S&P 500 by 20 to 27 percent over the fund’s life and more than 3 percent annually.”
That’s where the Trump administration’s policy changes come in.
Last August, President Trump signed an executive order titled “Democratizing Access to Alternative Investments for 401(k) Investors.” The straightforward goal of that order is to encourage retirement plans like 401(k)s to include funds that invest in private markets.
Just as importantly, the Department of Labor rescinded prior guidance that had discouraged these types of investments in retirement plans. That guidance had created legal uncertainty and fear of lawsuits, effectively keeping private investments out of reach for most retirement savers.
Together, these actions represent a major shift – and a direct challenge to a system that has long favored institutional investors over everyday Americans.
The report highlights just how skewed that system has been. DC plans now hold about $30 trillion in assets, or roughly 70 percent of all U.S. retirement savings. Yet despite that massive pool of capital, these plans have allocated just 0.1 percent to private markets, compared to about 30 percent for large pension funds.
In other words, the biggest investors have had access to higher-growth opportunities, while ordinary Americans have largely been shut out. For seniors and those nearing retirement, Trump’s policy shifts could have meaningful financial implications.
The report finds that adding even a modest amount of private equity to a retirement portfolio can improve returns while also reducing overall risk through diversification. In fact, the ERP concludes that “all age cohorts benefit from higher risk-adjusted returns” when private investments are included in a portfolio.
That’s a critical point. Many retirees are understandably cautious about risk. But diversification – spreading investments across different asset types – is one of the most effective ways to protect and grow savings over time. Private investments, which don’t always move in lockstep with public markets, can help achieve that balance.
The ERP estimates that expanding access to private investments could increase lifetime retirement income by about 1.3 percent overall. While that may sound modest, it could represent tens of thousands of additional dollars for retirees – without requiring them to save more or work longer. It could also shield near-retirees from bearing the brunt of downturns in public markets that might force them to delay retirement plans.
For younger workers, the gains are even larger, with some seeing increases of up to 2.5 percent over their lifetime.
The ERP also finds that expanding access to private markets could boost the broader economy. By allowing more capital to flow into high-growth private companies, Trump’s policies could increase U.S. economic output by roughly $35 billion. Private companies, especially those backed by private equity, tend to be more productive and grow faster than their public counterparts.
At a time when many Americans are concerned about the stability of their retirement savings, these reforms offer a clear path forward.
For too long, a regulatory framework built around outdated assumptions has effectively walled off some of the most lucrative investment opportunities from the very people who need them most. As the report outlines, only about 18.5 percent of U.S. households qualify as “accredited investors,” meaning the vast majority have been excluded from direct access to private markets.
The Trump administration’s approach flips that model on its head by bringing those opportunities into the retirement accounts that millions of Americans already rely on.
For AMAC members and retirees throughout the country, the significance is hard to overstate. This isn’t just a technical regulatory change buried in a government report. It’s a fundamental shift toward a fairer and more inclusive investment system – one that gives everyday Americans a chance to benefit from the same growth opportunities that have long been reserved for Wall Street insiders.
If implemented effectively, it could mark one of the most important retirement policy reforms in years, helping seniors protect their savings, grow their wealth, and enjoy greater financial security in the years ahead.
Shane Harris is the Editor-in-Chief of AMAC Newsline. You can follow him on X @shaneharris513.
Aside from the fact that these types of private equity investments have historically underperformed S&P 500 and Total U.S. Stock Market index funds, you can’t always get your money out when you need it.
In any case, know what you are buying. If you can’t describe how a particular investment works, run the other way.
Would have been nice to have had this 20 years ago, good for many people
Publicity about this. This is the first I hear about this. I have been out of the news loop for a bit due to illness and hospitalization rehab and moving. This is huge for many Americans with a 401K. The democrats didn’t come with a policy like that. They only Build Back Better and gave the money to their cronies to keep voting against President Trump and his supporters to bring this country down. They should all be arrested for the millions and millions of dollars they spend overseas on causes like trans and Gay tv shows and kindergarten books teaching the kids gay sex and mutilate those kids in the name of trans. Disgusting how much money, tax money went to the lefty dems and to the illegals while the needy citizens were living on the streets in the dems states like it was the most natural thing in the world. They created food shortage by burning down distribution centers. Many had fires that were caught in time. But they were everywhere and the other day there was one again one in CA. Remember the baby formula that was contaminated and babies were starving or going hungry. Biden didn’t do nothing. Didn’t even be proactive to make sure there was a backup plan in place if or when this would happen again. The list of nothingness being done by the dems gets shorter by the day. And President Trump’s accomplishments is getting longer. We American are living in prosperous times only to get more prosperous in the coming months. Vote these democrats communists out. Because they will run out of spending other people’s money in spite of what Mamdani said today. Nothing is free in this world. Socialism nor communism works. Because the people’s money won’t be there after a while. For why should we the working people provide you with money by laying on your couch playing video games. Mamdani, the money will run out.
“Democratizing,” what a sales scam! By definition, private investments cannot be easily redeemed, they are illiquid. Now, imagine a whole “fund” of private investments, none of which are liquid. If you need your money, tough luck. Also, private investment have hidden fees on the buy side and on the liquidation side, and so do the funds to pay the fund managers. This means that even if a given private investment is highly successful, those who set it up and managed it will make a killing, and the investors may very well be lucky to make a market rate return. Another big win for Wall Street, and rip off being perpetrated on 401k investors!
Lets look at a real solution: the Trad IRA moving to 10 yr liquidation for inheritance. We have saved all our lives did not have access to this privileged investment returns. How about dropping our RMD tax to compensate. And put the inheritance for our kids back to their calculated life time.
Do away with forced RMD should be on the list as well. JMO
President GW Bush talked about doing this and I was very enthusiastic, but nothing came of it. It will be great for my kids but a little too late for me.
Since my EX blew all my retirement savings, including saying I had to pay his final court costs to get him out of prison – which I LATER found I didn’t have to pay! Now, at 81, I can’t work due to CHF, Arthritus in my bones, essential tremor in my dominite hand, gout (if I eat the wrong things) stage III chronic Kidney, knee that has nothin but bone to bone (and can’t afford to have it replaced, OR to pay for the rehab. Thankfully I remarried and a wonderful man who had loved me for years, found me, and he has become my full-time caregiver – other than most of our food we get from Food Bank, I do buy his coffee and tobacco (he rolls his own), and he cares for my home and my large yard – has a 2009 GMC he received from his father’s estate, which HE DOES ALL MECHANICAL REPAIRS – LITERALLY, EVEN CHANGING THE COMPUTER IN IT!), ETC. I pay all expendetures for such and keeping yard equipment running – he gets nothing but my LOVE! My eyes are going rapidly bad, but because I always cracked my knuckles in my fingers, and still do, they still work! I’m surely thankful for that! I cannot afford to give him extra $! We literally have only $70 left in the bank for gas to dr’s appts and food till the end of the month!!! THEREFORE THE “NO TAX” ON SS DID ME NO GOOD! (Sorry for the ‘sob’ story….)
This is a great article and a great blessing by the US president D J Trump may Yeshua bless him is is efforts and Congress get on board too!
A very keen and timely idea. Our experience with some equity funds is great returns however, many hold the investment and reinvest profits, which when retired: timing is everything. The details are quite important so money is not HELD by the investing firm.