Do 401(k) Savers Understand the Private Assets They Want?

TL;DR: More than half of 401(k) savers say they would invest in private equity and private debt if their plan offered it, according to Schroders' 2026 survey, reported by Yahoo Finance. Only about a quarter call themselves very knowledgeable, and advisers suggest capping initial allocations at 5% to 10%.

Key Takeaways

• 52% of plan participants in the Schroders 2026 survey would invest in private assets if offered, up from 45% in 2025 and 36% in 2024.
• Almost a quarter call themselves very knowledgeable, and 37% report limited or no knowledge.
• The Labor Department and SEC proposal drew over 47,000 public comments and is not final.
• Advisers quoted by Yahoo Finance suggest a 5% to 10% cap to start.

What did the survey find?

Savers' appetite for private assets has risen in each of Schroders' last two surveys. Yahoo Finance reported on November 2 that more than half of investors in a 401(k) or similar plan would invest in private equity and private debt if their plan offered them, according to Schroders' 2026 US Retirement Survey. Alternative Credit Investor puts the figure at 52% for savers in 401(k), 403(b) or 457 plans.

The same coverage says 81% of those interested would raise their contributions if their plan gave them access. About 42% expect private assets to show up in their plan within five years.

Survey year	Would invest in private assets if offered	Source
2024	36%	Alternative Credit Investor
2025	45%	Alternative Credit Investor
2026	52%	Alternative Credit Investor

The climb is steady. It comes before the product is widely on the menu, so the demand looks built by headlines and policy rather than by anyone's experience with the assets. We covered the earlier stretch of this trend in Private Assets in 401(k)s: Savers' Interest Is Rising.

Do savers actually know what they are buying?

Partly. Yahoo Finance says almost a quarter of participants now call themselves very knowledgeable about private assets, nearly double the 12% from 2025. Alternative Credit Investor adds that 40% are somewhat knowledgeable and 37% report limited or no knowledge.

Those are self-ratings. They show how confident people feel, but they don't test whether a saver can explain a lockup, a redemption gate or a fee layer. Confidence that nearly doubles in a year, before most plans even offer the product, wasn't earned by living with it.

What are regulators and academics warning about?

Regulators are working to open the door while academics and the SEC itself flag what could go wrong. Per Yahoo Finance, the Department of Labor and the Securities and Exchange Commission proposed a rule after President Trump's 2025 executive order that would let 401(k) plans more easily include alternatives such as crypto, real estate and private market assets. The proposal drew over 47,000 public comments.

The caution is on record too. The Darden School at the University of Virginia reports that a Financial Economists Roundtable statement warns expanded access without attention to market structure could expose retirement savers to "significant risks." The same statement acknowledges advantages may exist for long-term retail investors.

The SEC's investment management director spoke to the issue on November 2. According to the Mutual Fund Directors Forum, he noted that retail investors know the risk of poor performance but may be less familiar with novel strategies, suspension gates and binary payouts. He also called for fiduciary protections and guardrails on any retail access proposal.

How much should go into private assets?

Advisers lean cautious. Per Yahoo Finance, most advisers say people interested in private assets should cap allocations at 5% to 10% initially. Alternative Credit Investor says 49% would allocate under 10%, while 39% would put in 10% to 15%.

The test that matters is one of our own: what happens if you need this money sooner than expected? A fund with gates answers that differently than an index fund does.

What does this mean for accredited investors?

If you already look at private deals, a 401(k) menu won't change the due diligence. Downside first still applies: fee stack, liquidity terms and sponsor quality decide the outcome, so read the fee stack before the pitch.

What differs is the wrapper. A plan menu has to let participants move money, so a private sleeve inside it is likely to be a pooled fund with its own fee layer and redemption limits. That is a different animal from a direct deal where you commit capital, answer capital calls and hold to exit. Our guides to private credit and BDC access and capital calls in private equity cover mechanics that plan menus tend to hide. For the systemic side, see what the FSB flagged about private credit risk.

What to watch next is the final shape of the proposed rule. The survey shows demand. It doesn't show whether the products plans choose will be priced and structured with savers in mind. Verify before you trust.

Common mistakes

Treating availability as approval is the one that costs people most. A product being allowed in a 401(k) says nothing about whether it fits your timeline. Plenty of savers also size the position by enthusiasm instead of by how soon they may need the cash, and that's where gates start to hurt. And when you read average returns for private funds, remember they describe the group, not your manager. Results vary widely between managers.

FAQ

How should money be invested in retirement?

That depends on your timeline and your need for access to the money.

Are private assets already in most 401(k) plans?

Not widely. About 42% of savers in the Schroders survey expect them in their plan within five years, which implies they are mostly absent today. Check your own plan's fund list.

Is the Labor Department and SEC rule final?

The sources here describe it as a proposal issued at the end of March that drew over 47,000 comments. They don't report a final rule.

What risks do retail investors tend to overlook?

According to the SEC's investment management director, retail investors may be less familiar with novel strategies, suspension gates and binary payouts than with simple underperformance.

Your next step

Sign up for the free AIN briefing and we'll send you the final rule and what it means for your plan when it lands.

Educational content only. Not investment, tax, or legal advice. Not an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Private-market investments are illiquid and involve risk of loss, including total loss of capital. Consult qualified advisers. Angel Investors Network is not a broker-dealer or investment adviser.