The Great American Retirement Heist: How Trump and Wall Street Are Circling Your Nest Egg
An August 2025 executive order and a March 2026 Labor Department rule have opened the $12 trillion 401(k) market to private equity, private credit, and cryptocurrency — the riskiest, most opaque, and highest-fee corners of finance. As the same administration guts the Social Security Administration and floats “Trump Accounts” as a backdoor to privatization, the message to American workers is unmistakable: your retirement is now a revenue stream for the president’s donors.
For four decades, the American retirement compact rested on a two-legged stool: Social Security, funded by a lifetime of payroll deductions, and a workplace 401(k), invested prudently in the diversified, liquid, publicly traded securities that regulators once insisted upon. In just under a year, President Donald Trump has moved decisively to kick both legs out — one by executive order steering trillions of dollars in workers’ savings toward the private equity firms that have quietly become his administration’s most lucrative constituency, the other by hollowing out the very agency that pays 70 million Americans their earned benefits each month. This is not a policy debate. It is a wealth transfer, engineered from the Oval Office.
On August 7, 2025, Trump signed Executive Order 14330 — titled, in the Orwellian idiom that has become the administration’s trademark, “Democratizing Access to Alternative Assets for 401(k) Investors.” The order directs the Department of Labor, the Treasury, and the Securities and Exchange Commission to clear the regulatory brush that has, for a generation, kept private equity, private credit, real estate funds, and cryptocurrency out of the workplace retirement plans on which most non-pensioned Americans depend. Within 180 days, the order instructed regulators to revisit the fiduciary duty standard under the Employee Retirement Income Security Act (ERISA) — the very standard that has protected workers from being steered into high-fee, illiquid, opaque investments they cannot evaluate.
The order arrived precisely as Wall Street’s private-markets industry had been begging for it. As CNN reported the day it was signed, there has been a steady push in recent months by the private equity and credit industry to gain access to the more than $12 trillion market in defined-contribution workplace savings plans. Blackstone, Apollo, KKR, and Carlyle — the four largest private equity houses in the world — had spent years lobbying for exactly this outcome. They got it.
I. The Rule That Made It Real
An executive order alone does not change law. But on March 30, 2026, Labor Secretary Lori Chavez-DeRemer’s Department of Labor published a proposed rule — the “Fiduciary Duties in Selecting Designated Investment Alternatives” — that operationalizes the president’s directive. The proposed rule creates a formal, process-based “safe harbor” for plan fiduciaries who choose to include private equity, private credit, real estate, or digital-asset funds in a 401(k) menu. If a fiduciary follows the six-factor checklist DOL laid out, the rule creates a legal presumption that the duty of prudence — the bedrock protection of ERISA — has been satisfied.
The practical effect is enormous. As Sen. Elizabeth Warren, ranking Democrat on the Senate Banking Committee, wrote in her statement the day the rule was released, this is a policy designed to expose Americans’ retirement accounts to private markets and cryptocurrencies at the very moment those markets are showing serious stress. And it does so by inoculating the plan managers who steer workers into these products from the lawsuits that have historically been the only real check on abusive fiduciaries.
The Private Equity Stakeholder Project has warned that the safe harbor could insulate private equity firms from scrutiny while shifting risk onto workers saving for retirement. Notably, the DOL rescinded a 2022 guidance document that had urged fiduciaries to exercise extreme care before adding cryptocurrency to a 401(k) menu — reversing course, in the words of a joint letter from Sens. Warren and Bernie Sanders, “abruptly and without clear reasoning.”
“President Trump just granted private equity billionaires their biggest wish: access to Americans’ retirement savings. It’s just another Trump giveaway to the billionaires on the backs of working people.”
— Sen. Elizabeth Warren (D-Mass.), Aug. 7, 2025
II. What the Data Actually Shows
The administration’s public case rests on a single claim: private equity delivers superior returns, and workers deserve access to them. The evidence does not support that claim.
According to an MSCI index of U.S. private equity funds cited by TheStreet, private equity delivered an annualized return of just 5.8 percent from 2022 through the third quarter of 2025 — while the S&P 500 returned 11.6 percent over the same period. In 2024 alone, private-market funds returned roughly 7.08 percent; the S&P returned 25.02 percent. Alicia Munnell, senior adviser at the Center for Retirement Research at Boston College, has warned that private equity’s opacity introduces avoidable risk into retirement portfolios.
Meanwhile the fee structures are, by any honest reckoning, extractive, and some would say, robbery. As one Oklahoma City registered investment adviser summarized the industry standard: a 2 percent annual management fee, plus 20 percent of all investment gains — is orders of magnitude greater than the roughly 0.03 to 0.10 percent that a broad-market index fund charges. The math is unforgiving. Over a 30-year career, the fee differential alone can cost a saver a quarter of their nest egg.
There is also a racial-equity dimension the administration has ignored. A 2024 National Bureau of Economic Research report found that 23.3 percent of Black retirement savers made an early withdrawal from a defined-contribution plan in a given year — nearly double the 12.3 percent rate for white savers. Locking those same savers into illiquid private funds — funds that impose steep discounts and delayed redemptions on anyone forced to sell early — is not a “democratization” of finance. It is a targeted extraction.
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III. The Social Security Squeeze
If the 401(k) heist were happening in isolation, it would be scandal enough. It is not. The same administration is simultaneously dismantling the other half of the American retirement compact — Social Security itself.
Under the auspices of the so-called Department of Government Efficiency (DOGE), the Social Security Administration has been ordered to cut roughly 7,000 workers — 12 percent of its workforce — while shrinking or shuttering dozens of field offices across the country. The Economic Policy Institute has noted that some of those closures may be replaced by leases at higher cost from Trump-aligned real-estate insiders who acquired the vacated buildings at fire-sale prices. The Center on Budget and Policy Priorities has documented that DOGE’s activities risk both SSA operations and the security of Americans’ personal data.
In March 2025, former SSA Commissioner Martin O’Malley warned CNBC that the system would collapse and see an interruption of benefits within 30 to 90 days. That was 17 months ago. The interruption has not been catastrophic — yet — but wait times have ballooned, the toll-free line crashes routinely, and disability adjudications are being delayed by months.
And then, in July 2025, Treasury Secretary Scott Bessent said the quiet part out loud. Speaking of the “Trump Accounts” written into the Republican tax package, Bessent described them, in the words of House Ways and Means Social Security Subcommittee Ranking Member John Larson, as “a ‘back door to privatizing Social Security.'” Larson did not mince words: “These so-called ‘Trump Accounts’ are their veiled attempt to replace Social Security and hand your earned benefits over to Wall Street.”
Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, was blunter still.
“Calling this a five-alarm fire is an understatement. Trump was lying all along about protecting Social Security. Like every Republican administration going back multiple generations, Trump and his billionaire cabinet want to privatize Social Security to give their Wall Street buddies a payday.”
— Sen. Ron Wyden (D-Ore.), July 30, 2025
Total assets held in 401(k)-style defined-contribution plans nationwide — the pool the executive order opens to alternative assets. Source: The White House
Typical private equity management fee plus performance cut — versus a fraction of a percent for the index funds most savers hold today. Source: NPR
Independent retirement consultants and administrators acquired by private-equity-backed buyers over the past decade, per PitchBook. Source: Bloomberg
The level private equity returns had reportedly sunk to even as the industry pushed its way into 401(k)s. Source: Senate Banking Committee
Social Security Administration staff eliminated in 15 months — leaving the agency smaller than at any point since 1967. Source: CBPP
IV. Who Actually Profits
Follow the money — because in this administration, it almost always leads to the same short list of names.
Stephen Schwarzman, the founder and chairman of Blackstone, is worth roughly $50 billion. He supported Trump’s 2016 campaign, donated $3 million to the failed 2020 reelection bid, and — after a brief post-January 6 estrangement — was seated at the head table with Trump and the emir of Qatar at a May 2025 state dinner. As The New Republic’s Timothy Noah observed, Blackstone’s future profitability, in a slumping private-equity market, “may depend on” opening 401(k) plans to its products. That is Schwarzman’s interest. Trump’s interest, Noah wrote flatly, is that Schwarzman has shoveled a lot of money his way.
Blackstone was in the news the week of the DOL rule specifically because it was creating a new business unit to tap the newly opened 401(k) market. Apollo, KKR, and Carlyle have followed. Together, according to Truthout, private equity firms already control roughly one-fifth of the U.S. economy and 18,000 companies. Now they will have access to workers’ payroll deductions as well.
And then there is the president’s own balance sheet. According to a July 2026 financial disclosure filed with the Office of Government Ethics — a 927-page document, by contrast with President Obama’s eight-page final filing — Trump and his family earned more than $1 billion in 2025 from cryptocurrency ventures alone. World Liberty Financial, the family’s DeFi platform, contributed more than $500 million; Trump-branded meme coins added another $600 million. This is the same digital-asset sector the president’s executive order has now opened to America’s retirement plans, and the same one his SEC chairman, former crypto lobbyist Paul Atkins, has declared largely outside SEC jurisdiction. The conflict of interest is not subtle. It is the business model.
V. Oversight, Accountability, Security — a Ledger of Absence
What protects the American saver in this new arrangement? Almost nothing.
Oversight: The DOL’s safe harbor rule replaces the substantive fiduciary duty with a procedural checklist. If a plan manager can document that they considered six factors, they are legally presumed to have acted prudently — regardless of whether the investment actually was prudent. As one legal analysis noted, the rule opens the door for plan sponsors to consider adding private equity, real estate, digital asset funds, and other alternatives without fear of automatic regulatory attention or litigation.
Accountability: The rule’s central feature is precisely to limit the ability of workers to sue when things go wrong. As the Private Equity Stakeholder Project warned, the administration’s push for broad safe harbors could insulate private equity firms from scrutiny while shifting risk onto workers. The Supreme Court is now hearing Anderson v. Intel Corp., a case in which retirees have challenged a private-equity allocation inside a target-date fund — a case whose outcome the DOL rule is transparently designed to influence.
Security: None to speak of. Private funds are not required to price daily. They are not required to allow redemptions on the schedule a retirement saver might need. They report their own valuations. They are, in the words of one Rochester-area registered investment adviser: illiquid, expensive, and often lack transparency. If a saver is laid off at 61 and needs to draw on a target-date fund holding 15 percent private assets, they may find their money quite literally locked up.
VI. Why This — and Why Now
The question the American public deserves an honest answer to is the one this editorial board keeps returning to: why?
There is no economic emergency that required opening retirement savings to private markets. Ordinary Americans were not petitioning the White House for the right to pay 2-and-20 fees for illiquid holdings. Public-sector pension funds — the sophisticated institutional investors who have had access to private equity for decades — have been pulling back from the asset class, not doubling down. The push came from precisely one place: the private-markets industry itself, which needs new capital to sustain a business model that has stopped delivering excess returns.
What the American people are getting is a policy that transfers risk downward and profit upward, wrapped in the language of “democratization.” What Wall Street is getting is a $12 trillion new addressable market, unlocked by a president whose own family has become a nine-figure beneficiary of the adjacent, and equally opened, crypto sector. What the Social Security Administration is getting is a slow strangulation. What the American worker is getting is a bill they were never asked to authorize.
Call it what it is: a grift dressed up as reform, financed by the retirement savings of the very Americans who worked their whole lives to pay for it.
When Judgment Fails, the Constitution Provides a Remedy
The mechanism. Section 4 of the Twenty-Fifth Amendment permits the Vice President and a majority of the Cabinet — or the Vice President and a body Congress may designate — to declare in writing to the President pro tempore of the Senate and the Speaker of the House that the President is “unable to discharge the powers and duties of his office.” The Vice President then assumes those duties as Acting President. It was written, in the aftermath of the Kennedy assassination, precisely for moments when the person occupying the office is no longer capable of exercising the sound judgment the office requires.
Who has called for it. On April 10, 2026, Rep. Jamie Raskin, ranking Democrat on the House Judiciary Committee, formally demanded a comprehensive cognitive and neurological evaluation of the president and full public disclosure of the findings. Rep. Raja Krishnamoorthi has called on Vice President JD Vance and the Cabinet to invoke Section 4 outright. On April 30, 2026, Sens. Sheldon Whitehouse and Jack Reed entered into the Congressional Record a statement signed by 36 physicians — neurologists, psychiatrists, and cognitive specialists from Harvard, Tufts, Columbia, and George Washington — calling for removal “with the greatest urgency.”
The constitutional argument as it applies here. A president who signs an executive order handing $12 trillion of workers’ retirement savings to a small circle of donor-class financiers — while his own family is earning nine-figure sums from the same asset classes the order privileges — is not exercising the fiduciary judgment the Constitution presumes of the office. When compounded by verbal incoherence, erratic public statements, and policy decisions that consistently confuse public trust with personal enrichment, the pattern is not merely bad governance. It is the pattern the Twenty-Fifth Amendment was drafted to address: a chief executive whose capacity to distinguish the national interest from his private one has meaningfully degraded.
The practical barriers. Section 4 requires the Vice President’s cooperation, and a majority of a Cabinet composed entirely of the president’s appointees. Vice President Vance has shown no inclination to move. That is a real obstacle, and pretending otherwise would be dishonest.
Why the barriers do not negate the case. The moral and constitutional argument does not depend on the political likelihood of its adoption. That 36 physicians felt compelled to enter a formal warning into the Congressional Record; that a growing number of House and Senate members have raised the question openly; that Rep. Raskin has introduced legislation to create a bipartisan, independent commission to evaluate presidential capacity — all of this is the constitutional immune system responding to a legitimate infection. The Twenty-Fifth Amendment is on the books. When the conditions it anticipates are visible in plain daylight — as the 401(k) grab, the Social Security dismantlement, and the family crypto empire together make them — the failure to discuss the amendment would itself be a dereliction. Naming the remedy is not the same as invoking it. It is the beginning of the accountability the Constitution demands.
Editorial Conclusion
An American who worked forty years, paid into Social Security every one of them, and dutifully contributed to a 401(k) alongside it, did not consent to have their retirement rewritten as a subsidy for Blackstone, Apollo, and a presidential family’s crypto ventures. They did not consent to have the Social Security Administration hollowed out, its offices closed, its phone lines collapsed. They did not consent to a fiduciary standard replaced with a checklist.
What is at stake here is not a policy dispute between economists. It is whether the presidency will be used to protect the retirement security of the American worker, or to loot it. On the evidence of the last twelve months, this president has chosen the latter — and the Constitution provides a remedy for a chief executive whose judgment has so plainly failed the office. It is time to use every tool the Constitution offers: Congressional oversight, litigation, the ballot, and — where the facts warrant — the Twenty-Fifth Amendment itself.
America has had enough.
Sources & References
- NBC News — Private equity needs new investors — it’s targeting your 401(k)
- NBC News — Trump paves path for private equity and crypto in retirement accounts
- CNN Business — Trump signs executive order to open 401(k)s to private equity
- NPR — Trump opens the door for private equity in retirement plans
- CBS News — What Trump’s 401(k) executive order means for savers
- Sen. Warren Statement — Warren on Trump’s EO opening 401(k)s to risky assets
- Americans for Financial Reform — The Private Equity 401(k) Trap
- Private Equity Stakeholder Project — Trump admin bails out private equity with 401(k)s
- TheStreet — Private equity in 401(k)s: what savers need to know
- The New Republic — How the Trump Oligarchy Works: Stephen Schwarzman
- The New Republic — Trump’s new gift to crypto and private equity: your 401(k)
- U.S. Dept. of Labor — DOL proposes landmark rule on alternative investments in 401(k)s
- Rep. John Larson — Trump administration just admitted they are out to privatize Social Security
- Sen. Ron Wyden — Wyden statement on Trump plan to privatize Social Security
- Economic Policy Institute — What is DOGE doing to Social Security?
- Center on Budget & Policy Priorities — Trump/DOGE activities risk SSA operations and data security
- Rep. Jamie Raskin — Raskin demands cognitive evaluation of Trump
- The Hill — Trump’s decline and the 25th Amendment
- NPR — Former ethics lawyer: Trump crypto poses “clear conflict of interest”
- Morrison Foerster — DOL proposed rule on 401(k) alternative assets: legal analysis
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