Your 401(k) Is About to Change

WEBVTT

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For most of your life, your 401k has only been

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allowed to hold things like mutual funds and

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index funds. Public, liquid, transparent. That's

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all about to change. The Department of Labor

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is finalizing a rule that would let your 401k

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hold private equity, private credit, real estate,

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and even crypto. This is one of the biggest structural

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shifts to retirement investing in decades, and

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most account holders have no idea it's coming.

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I'm your host, Geil Thompson, and this is Faith

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in Finance. So what's actually changing? Here's

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the background. Last August, the president signed

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an executive order directing federal regulators

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to open up 401k plans. the accounts most working

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Americans use for retirement, to what's called

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alternative assets. That means private equity,

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private credit, real estate, infrastructure funds,

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and actively managed crypto vehicles. And in

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March of this year, 2026, the Department of Labor

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released its actual proposed rule. It doesn't

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force any plan to add these investments. It gives

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plan fiduciaries a safe harbor, a defined process

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they can follow to include alternative assets

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without as much fear of getting sued for it later.

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That detail matters because for years, the biggest

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reason 401k plans avoided private equity wasn't

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that it was necessarily a bad investment. It

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was litigation risk for the employers offering

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it. Why does this matter to you specifically?

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Because private equity, private credit, and similar

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assets behave completely different than the mutual

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funds that you may be used to. They're illiquid,

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meaning you can't just sell on demand the way

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you can with a public stock or a fund. Their

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valuations are harder to verify because there's

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no public market setting the price every day.

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And the fee structures tend to be significantly

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higher than a typical index fund. There's a real

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live legal case worth knowing about here too.

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So I do want you to go do your research and research

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this. The Supreme Court agreed this year in 2026

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to hear a case involving Intel's 401k plan, where

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participants argued that including private equity

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and hedge funds hurt them through higher fees

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and worse performance compared to a simple public

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index fund. That case is a direct preview of

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the tension this new rule creates. access to

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potentially higher returns versus complexity

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and costs that may not benefit the average participant.

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So what does this mean for you and your actual

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decisions? So I want you to think about it this

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way. If your plan at your job adds these options

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in the next year or two, because you may see

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them when you log in to look at your 401k plan.

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Here's what actually matters when you're deciding

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whether to use them. First, understand what you're

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giving up for liquidity. Private market investments

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often lock up your money for years if you need

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to rebalance or if your circumstances change,

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meaning you may want to take a loan or even a

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withdrawal. You may not be able to move quickly

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the way you could sell out of mutual fund or

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selling shares. Listen, second, I want you to

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know this. Fees compound just like returns do.

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A fund with a much higher expense ratio has to

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significantly outperform a low -cost index fund

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just to break even for you over time. That math

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needs to be run explicitly, not assumed. So know

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your fees. Third, and this is the part people

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skip, just because something is now available

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in your 401k doesn't mean it's appropriate for

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your specific allocation. A retirement plan menu

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having an option doesn't function as an endorsement

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that you should personally use it. So let's discuss

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what the scripture already has to say about something

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like this. There's a passage that speaks exactly

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to this kind of decision making. And it's more

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specific than people usually realize. Ecclesiastes

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chapter 11 opens with the writer telling his

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audience to send their resources out and not

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hold everything back waiting for certainty. But

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then it gets more precise. He tells them to divide

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their portion among seven or even eight ventures.

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That's called diversification. Because in his

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words, no one knows what disaster might happen

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on earth. The passage goes on to say that a farmer

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who does wait for perfect wind and perfect weather

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before planting or harvesting and I'll add diversifying

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will end up doing neither. Listen, if you read

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this plainly, this passage is about diversification.

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and about the danger of paralysis while waiting

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for certainty that never comes. We've talked

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about this time and time again, trusting in a

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Babylonian system, or I don't want to call it

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a Babylonian system, but trusting in a system

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that is not kingdom -based. The Bible says that

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you should trust in nothing but God. It doesn't

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say put everything into one bold venture and

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trust it'll work out. It says spread it out.

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specifically because the future is unknowable,

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which is about as directly relevant to a conversation

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about adding new, less familiar assets into your

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retirement account as any verse in scripture

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can get. Here's how I'd apply it to this exact

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moment into my life. The Ecclesiastes principle

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isn't avoiding anything new or unfamiliar. It's

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don't put everything into one thing, especially

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when you can't fully see what's ahead. So I understand

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this may be a new opportunity. It may be an exciting

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opportunity for you to be engaged or invested

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in asset structures that you've never seen before.

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But the Bible also talks about that nobody goes

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to war and does not count the cost. Understand

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the product that you're investing in. Understand

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the expenses associated with it. And also understand

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if there are any lockup periods that you should

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be aware of. See, a retirement account holding

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several straightforward, low -cost liquid funds

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is already living out a version of that wisdom.

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But adding in private equity allocations isn't

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automatically wrong. So don't misunderstand me.

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But adding it as a large concentrated bet without

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fully understanding it, without fully understanding

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its fees and its illiquidity can ruin you. Listen,

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it runs against this very principle in this passage

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that we're describing. So all I'm saying is,

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is be safe. Be smart and always, listen, the

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Bible says people perish for lack of knowledge.

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So make sure that you understand what it is that

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you're investing in before you get invested.

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Diversification isn't a modern invention. Wall

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Street came up with, okay? It's a very old idea

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showing up here in a very old book. For the same

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reason it showed up in a modern portfolio. Nobody

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can see far enough ahead to bet everything just

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on one outcome. Listen, new options in your 401k

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aren't automatically good or bad. They're just

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new variables in a decision that was always supposed

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to be made carefully, not automatically. Spread

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out, not all in, exactly the way this has been

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understood for a very long time. If you're ready

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to begin your investment journey, or maybe if

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you have a 401k, an IRA, or assets that you're

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looking for a trusted advisor, I ask that you

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consider Joseph Wealth Management. Call our team.

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Our phone number is 800 -807 -2881 or email us

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at info at josephwealthmanagement .com. If you

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have a question for Faith and Finance, Call that

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same number and ask to be transferred to our

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voicemail system. Tell us your name and the city

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and state you're calling from. Who knows? Your

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question might be featured on an upcoming episode.

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Thank you for listening to Faith and Finance,

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and I look forward to seeing you next time. The

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Faith and Finance podcast is intended for educational,

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informational, and entertainment purposes only.

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The views and opinions expressed by the hosts

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and guests are their own and do not necessarily

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reflect those of Joseph Wealth Management, Joseph

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Eden Capital, or any affiliated entities. Nothing

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shared on this podcast should be construed as

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personalized, financial, legal, tax, or investment

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advice. All investing carries risk, including

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the potential loss of principal. Listeners are

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strongly encouraged to consult with a licensed

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financial We'll be right back. We'll be right

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back.