Retirement savers are keen to invest in private assets. Do they know what they’re doing?

A majority of retirement savers are itching to invest in private assets, a new survey finds.

More than half of investors participating in a 401(k) or similar workplace retirement plans say they would invest in private equity and private debt if their plan offered them, according to investment manager Schroders’ 2026 US Retirement Survey.

That’s up from 45% in 2025 and 36% in 2024. More than 8 in 10 say they would boost their paycheck contributions to their plan if it offered access to private assets.

Private assets, such as private equity, venture capital, hedge funds, and real estate, are already legal in retirement accounts. However, most plans have been sitting on the sidelines and have not added them yet — for good reason.

Private investments typically come with limited or no ability to sell early, and private funds often carry performance fees and other layers of costs far above what most mutual fund options charge.

But the ship has sailed. 

“Private assets are moving into the mainstream as regulators and asset managers work to remove the barriers that have traditionally limited access to institutional investors and the ultra-wealthy,” Deb Boyden, Schroders’ head of US defined contribution, told Yahoo Finance.

Driving the eager demand

Roughly 4 in 10 plan participants now expect private assets to be available in their retirement plan within the next five years, and they are looking forward to that day. 

More than three-quarters of people who invest in a retirement plan at work say these investments will offer diversification and better returns than plain vanilla stocks and bonds.

Do they know what they’re really getting into? More and more retirement investors say they do. Almost a quarter of plan participants now consider themselves very knowledgeable about private assets, nearly double the 12% who said so in 2025. 

“Someone can say they are knowledgeable about private assets, but I would still want to know what they actually understand,” said Cary Carbonaro, a certified financial planner and the author of “Women and Wealth.”

“Do they understand the liquidity restrictions? The fees? The valuation process? The risk? The time horizon? Do they understand that diversification does not automatically mean lower risk?”

What’s behind the push

The Trump administration is all in. In response to President Trump’s 2025 executive order, the Department of Labor and the Securities and Exchange Commission proposed a rule that would allow 401(k) plans to more easily include alternative assets such as cryptocurrency, real estate, and private market assets.

Issued at the end of March, the proposal received over 47,000 public comments. It’s not yet a final rule.

The challenge is finding a legal way to add investment alternatives that meet the fiduciary requirement plan providers must adhere to, namely acting in the interests of participants and their beneficiaries.

“Private assets may have a place in a well-constructed retirement portfolio, but they are not automatically appropriate just because they are now available inside a 401(k). Access and suitability are two very different things,” said Carbonaro.

“Planning is like a puzzle to figure out. You have to look at the entire financial picture. How much liquidity do you need? How close are you to retirement? What other assets do you own? What is your risk tolerance? What happens if you need this money sooner than expected?”

Keep it to a minimum

Most advisers say people who are interested in private asset investing should limit allocations to a maximum of 5% to 10% initially.

“From a use-case standpoint, private assets have the potential to be a very good fit for workers with 401(k) plans, as the benefits of investing in the asset class tend to be the strongest for investors with long-term time horizons,” said Boyden.

Schroders’ research indicates that most people do plan to be cautious.

Among those who say they would invest retirement savings in private assets, about half would allocate less than 10%. Only 7% would allocate more than 15%.

“I would caution people against assuming that something is better simply because it feels more sophisticated or was previously available mainly to wealthy investors,” Carbonaro added. “More choices can be good, but more choices also create more responsibility.”

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work,” and “Never Too Old to Get Rich.”