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The Trump administration is preparing an executive order that would allow 401(k) retirement plans to invest in private equity, a move expected to benefit asset managers seeking access to the $12.5 trillion defined-contribution market. The directive, still under discussion, would build on prior efforts during Trump’s first term to integrate private equity into retirement portfolios, previously limited by legal and fiduciary concerns. 

Currently, most 401(k) investments are concentrated in traditional stocks and bonds, as plan administrators have been cautious about incorporating complex and illiquid assets. 

However, critics warn that such a shift could increase fees and risks for savers while exposing plan sponsors to potential lawsuits. The executive order, if signed, would mark a significant change in U.S. retirement policy and potentially reshape how Americans build wealth for retirement.

Finsum: Private equity could offer retirement savers higher long-term returns and a broader array of investment options, particularly as the number of public companies continues to shrink.

The SEC’s Office of the Investor Advocate announced it will examine the increasing use of private equity and other alternatives in retirement accounts as part of its fiscal 2026 objectives. The office has warned that adding private market products to 401(k)s and 403(b)s can pose risks for retail savers, especially in target-date funds and managed accounts. 

Concerns include limited liquidity, incomplete disclosures, and a higher risk of fraud or losses, which the agency will evaluate in relation to fiduciary duties under ERISA. This move follows Senator Elizabeth Warren’s letter to Empower Retirement questioning its plans to offer private equity in its 401(k) products. 

Beyond private equity, the investor advocate’s 2026 agenda will also prioritize improving retail investor disclosures, analyzing China-based VIE structures, collaborating with the SEC’s crypto task force, and using investor research to support rulemaking. 

Finsum: Advisors should aim to ensure retirement plan participants understand the trade-offs of these complex and often opaque investments.

Closed-end funds (CEFs), around since 1893, function much like pooled mutual funds but differ in that they have a fixed number of shares trading on public exchanges after their IPO. 

Unlike mutual funds, which create or redeem shares daily to match investor flows, CEFs trade like stocks, meaning their prices can swing above or below the fund’s actual net asset value (NAV). This market pricing dynamic allows investors to potentially buy a dollar’s worth of assets for 90 cents, creating attractive opportunities to purchase CEFs at discounts. 

In addition, CEFs can use leverage to amplify returns, which often translates to higher distribution yields than traditional funds. However, investors should generally avoid paying a premium above NAV, just as they wouldn’t pay $1.10 for a dollar. 

Finsum: CEFs trading at reasonable discounts with strong yields may offer a compelling addition to income-seeking portfolios, combining discounted asset value with robust payouts.

In today’s unpredictable economic landscape, retirees face mounting challenges in preserving their wealth as traditional strategies like the 60/40 portfolio falter under inflation and synchronized market downturns. The financial turmoil of recent years has exposed the shortcomings of conventional diversification, especially during crises like 2022 when both stocks and bonds fell sharply, undermining retirees’ income and security. 

As a result, many advisors now advocate incorporating alternative investments—such as private equity, real estate, and private credit—into retirement portfolios to broaden exposure and potentially enhance returns. Alternatives offer benefits like access to private markets, higher return potential through illiquidity premiums, and diversification through non-correlated strategies. 

Additionally, alternative strategies like managed futures and long/short funds can provide “crisis alpha,” cushioning portfolios during volatile markets. 

Finsum: While these vehicles carry higher fees, tax complexity, and liquidity constraints, their strategic use can help retirees mitigate risk, sustain income, and better navigate an uncertain financial future.

A new provision quietly inserted into President Donald Trump’s latest tax bill would give private equity firms expanded tax breaks when they acquire companies and burden them with debt. This language, buried in the One Big Beautiful Bill Act, would increase the allowable deduction on interest payments—effectively subsidizing leveraged buyouts that often result in layoffs, wage cuts, and bankruptcies. 

Despite the provision’s potential to drive billions in tax savings for Wall Street, lawmakers have downplayed its implications, describing it only as an increase in business interest deductibility. 

By altering how interest deductions are calculated—without raising the 30% cap—the bill could hand private equity firms up to a 15% increase in write-offs, according to legal and budget analysts. Over the next decade, this tax tweak is projected to cost the government $200 billion in lost revenue, deepening concerns about corporate accountability and tax fairness.

Finsum: If CNL capital is a well-positioned private equity firm that could be in a good position to benefit to these legal changes.