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By Amy Chou, Chief Product Officer, Addition Wealth
Retirement is undergoing a transformation. It's not just about people living longer or working differently, though that's true. It's also about the changing structure of retirement products and the opportunity to reimagine what financial security looks like for more people.
One of the most significant developments is the growing consideration of alternative assets (private equity, private credit, real estate, even digital assets) within 401(k) plans. This shift represents an exciting expansion of access. For decades, these asset classes have been largely out of reach for everyday savers. Now, plan sponsors and asset managers are rethinking how to bring investments that may offer diversification benefits to a broader audience.
It's a powerful step forward. But it also brings complexity.
Most participants aren’t asking how to optimize an exposure to secondary-market investments or how to allocate between private credit and private equity, even as plan design and investment menus evolve toward more sophisticated structures. They’re asking questions like, “Am I saving enough?” “Will I be okay in retirement?” “What do I need to do now to be on track?”
These are the questions that matter. And they’re often buried under layers of investment choice, jargon, and a growing menu of products that, even with the best intentions, can feel overwhelming.
That’s why this moment calls for more than access. It calls for clarity, accountability, and participant-centered design.
This evolution presents an incredible opportunity, not only to broaden access to asset classes, but also to broaden access to quality financial guidance. Because adding new products without the tools and unbiased guidance to navigate them risks increasing inequality instead of solving it.
This is where both technology and fiduciary support become critical. Most participants don’t want to become portfolio managers. They want advice they can trust. They want the complexity simplified and professionally managed for them. They want to know they’re on the right path.
Alternatives can absolutely play a role in delivering long-term value if implemented prudently. They offer diversification, the potential for higher returns, and broader participation in private market growth. But without personalized advice, strong education, and appropriate guardrails, they can also create friction and confusion.
That’s why any expansion into alternatives within retirement plans must come with:
Asset managers and retirement providers are already working hard to solve these complexities, but we have to acknowledge that the typical 401(k) participant isn’t a tax strategist or private fund analyst. Their outcomes will depend not just on what’s offered, but on how it’s offered and who’s guiding them.
This is a pivotal moment. Retirement is no longer a linear path. Lives are longer. Careers are more fluid. Wealth is more dynamic. We have the chance to build products and systems that meet people where they are and support their goals every step of the way.
Let’s expand access the right way. With innovation, yes. But also with empathy, rigor, and an unwavering focus on the people these systems are meant to serve.