Retirement Accounts Are Meant to Be Long-Term, Safe Money

Qualified retirement accounts like 401(k)s were created by Congress to encourage Americans to save for their later years. These accounts were designed for “safe money,” not high-risk bets. To protect retirement savers, Congress originally restricted the types of investments permitted in 401(k)s.

Unfortunately, we often see retirees who spent decades building up their nest egg only to lose it after being persuaded to put their savings into “guaranteed” programs, non-traded REITs, penny stocks, or expensive variable annuities. One bad decision or a dishonest advisor can devastate a lifetime of savings.

On August 7, 2025, President Trump signed an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors.” The order expands the investment choices available in 401(k) plans to include private equity, real estate, and even crypto-linked funds. While these options may offer diversification, they also carry higher fees, greater complexity, and significant risk.

For individual investors—and especially retirees—this development is a reminder to proceed with extreme caution. Losses in retirement accounts are very difficult to replace late in life. Before making any decision, consider these key rules of thumb:

• Never rush into an investment. Take your time and do not act on the spot.
• Research independently. Make sure you fully understand the risks. Avoid small-cap stocks and remember that insurance products like variable annuities are not the same as investments.
• Seek a second opinion. A trusted advisor or attorney can provide valuable perspective.
• Prioritize liquidity. Be wary of products that lock up your money, such as non-traded REITs or variable annuities with heavy penalties.

If you suffered losses in your retirement accounts because of unsuitable or risky investment recommendations, you may have legal options to recover. ChapmanAlbin represents investors nationwide in claims against brokers, advisors, and other financial professionals. Contact us for a free consultation to discuss your rights.