The risk of private equity in your 401(k)

This NPR Planet Money Indicator podcast episode discusses a potential executive order from President Trump that would allow 401(k) plans to invest in private equity. The episode explores the potential risks and benefits of such investments, highlighting the higher returns but also the increased risk, illiquidity, and higher fees associated with private equity. Experts weigh in on the prudence of such investments for retirement accounts, considering factors like the age of investors and the potential legal ramifications for plan managers. While acknowledging the lobbying efforts of private equity firms and the Department of Labor's 2020 letter suggesting the possibility, the podcast concludes that private equity investments in 401(k)s are unlikely to become widespread due to inherent risks and the core purpose of retirement accounts.