On August 7, 2025, President Donald Trump signed an executive order directing federal agencies (including the Department of Labor (DOL), Securities and Exchange Commission (SEC), Treasury, and IRS) to review and potentially revise retirement plan rules. The goal is to make it easier for Americans to invest 401(k) funds in a wider range of alternative assets, including private equity, real estate, infrastructure, commodities, and cryptocurrency.
This move does not immediately change any rules. Instead, it launches a regulatory process that could take months or years before investors see new options in their plans.
What’s Changing
Currently, most 401(k) plans are limited to publicly traded investments, including stocks, bonds, and mutual funds. Alternative assets (including private real estate investments like non-traded REITs, private equity real estate funds, and syndications) have been mostly inaccessible.
The executive order instructs agencies to review:
- Fiduciary standards for offering alternative assets in retirement plans
- Possible safe harbor protections for plan sponsors
- Regulatory barriers that currently keep private real estate out of most retirement plans
What Could Happen
If regulations are updated, employers and plan administrators may be able to offer:
- Private real estate funds alongside traditional mutual funds
- Direct real estate investment options for self-directed 401(k)s
- Tokenized real estate assets could allow smaller, fractional ownership stakes, although this was not mentioned in the order and remains speculative based on industry trends.
Why This Matters for Real Estate Investors
Adding real estate to a retirement portfolio can help protect against inflation and market volatility. In addition, opening retirement plans to private real estate could expand the pool of potential investors who have access to these opportunities inside tax-advantaged accounts.
U.S. 401(k) plans hold an estimated $9–12 trillion, and even a small shift toward real estate could create unprecedented liquidity in the market. This influx of capital could also increase competition for deals, as fund managers may race to create retirement-eligible real estate products.
The Catch
Even though the executive order is signed, federal agencies still need to:
- Define guardrails for plan sponsors
- Establish disclosure and transparency rules
- Clarify fiduciary responsibilities
The process could take many months to several years before investors can take advantage.
How You Can Position Your Portfolio
- Stay Informed: Track updates from the DOL, SEC, and IRS so you can move quickly when rules change.
- Build Capital Partnerships Now: Strengthen relationships with fund managers and syndicators likely to enter the 401(k) space.
- Be Deal-Ready: Early adopters often get better terms and access to the most attractive opportunities.
Partner with Dominion Financial
At Dominion Financial Services, we specialize in helping real estate investors move quickly when opportunity strikes. Whether it’s DSCR loans for long-term holds, Fix and Flip financing for short-term gains, or multifamily funding to scale your portfolio, our mission is simple: We give you the speed, leverage, and certainty to win deals, so when new 401(k) capital flows into the market, you will be ready to act.
Talk to our lending team today and let’s position your portfolio to capture the next wave of real estate opportunities.
INVESTOR TAKEAWAYS
Private real estate can help diversify retirement portfolios, hedge against inflation, and reduce volatility compared to equities alone. Allowing retirement accounts to hold real estate would open up trillions in retirement capital to the asset class, potentially creating more liquidity and investment opportunities.
Options could include private real estate funds, non-traded REITs, or even direct investment opportunities through self-directed accounts. Over time, tokenized real estate shares could make it possible for investors to hold fractional ownership in assets inside tax-advantaged plans.
While real estate offers diversification, it also carries risks such as illiquidity, valuation uncertainty, and management complexity. Investors and plan sponsors will need to weigh these factors against the potential for long-term stability and returns, and regulators will likely enforce strict transparency standards.
The benefits of holding private real estate in a 401(k) is diversification beyond stocks and bonds. Real estate also tends to be less correlated with public markets, which can reduce portfolio volatility. When held in a tax-advantaged account like a 401(k), investors may also benefit from deferring or eliminating taxes on gains, enhancing overall returns over time.
Investors can position themselves by staying informed on policy updates, building relationships with fund managers, and keeping capital strategies flexible. Being prepared to act early could mean access to better terms and more attractive opportunities once 401(k) plans begin offering private real estate options.
