Generation Z is entering the workforce with different investment options and market dynamics than previous generations. In a rapidly changing economy shaped by technology, private markets, and new financial products, traditional portfolios built on the S&P 500 and government bonds no longer reflect how wealth is created.
That’s why a quiet shift in retirement policy matters. After years of 401(k) plans limiting access to alternative asset classes such as cryptocurrency, private equity, and real estate, the Department of Labor has issued new guidance allowing these investments. Following last year’s executive order aimed at expanding retirement options for the middle class, the change broadens access for ordinary investors and creates new opportunities for their long-term portfolio growth.
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Retirement accounts are supposed to prepare Americans for the future. They ought to reflect the economy that future workers will actually retire into — not the one built decades ago.
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Digital assets, namely popular cryptocurrencies such as Bitcoin and Ethereum, are unique investments as technologies like artificial intelligence and blockchain increasingly shape the modern economy. Unlike traditional financial instruments, they are embedded in the infrastructure of a digital-first world where value is increasingly created, stored, and transferred online rather than through legacy financial systems.
With this new economic model comes the potential for outsize returns. As Sam Lyman, head of research at the Bitcoin Policy Institute, explains, “Bitcoin has appreciated more than 17,000% in value since 2016, making it the best-performing major asset class of the last decade.” All Americans should have access to participation in such growth, yet Bitcoin’s performance over the past decade has been excluded from 401(k) investment options.
Lyman also notes that “thousands of Americans are now using Bitcoin to save for retirement after educating themselves on the asset’s built-in scarcity and gold-like properties.” Expanding cryptocurrency options within 401(k) plans, he argues, “would simply make it easier for them to save in a tax-efficient way.”
Another rapidly growing asset class in the modern U.S. economy is private equity, which refers to investment in companies not listed on public markets. As individual investors typically cannot invest in these markets, allowing 401(k) plans to include targeted allocations to private equity would open access to one of the most significant wealth-creation engines in today’s financial system.
Over time, private equity delivers strong returns relative to public markets, often outperforming major stock indices over several decades. Beyond return potential, it also offers diversification benefits that are difficult to replicate through index funds tracking the S&P 500 or Dow Jones Industrial Average.
For years, large institutional investors and public pension funds have had access to private markets as part of their long-term investment strategies, while everyday workers saving through 401(k) plans have largely been excluded from the same opportunities. The Labor Department is making a change for the better by expanding investors’ freedom to choose.
But the shift should not stop here. As financial innovation continues apace, new asset classes and technologies will emerge alongside AI, blockchain, and other technological advances, reshaping global markets. While some speculative trends, from nonfungible tokens to collectible trading cards, may rise and fade, the broader trajectory is clear: The definition of “investable assets” is expanding.
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Retirement systems should evolve alongside that reality. If 401(k) plans are meant to build long-term security, they should not anchor Americans to an outdated version of the economy. Instead, they should give workers access to the full range of tools shaping wealth creation today and in the decades ahead.
The next generation will retire into the financial system of the future. Their portfolios should be prepared for it too.
Sam Raus is the David Boaz Resident Writing Fellow at Young Voices. Follow him on X: @SamRaus1.
