On January 20, 2026, the landscape of American retirement and housing policy saw two significant developments, both aiming to reshape how workers can leverage their 401(k) savings. OneDigital, a prominent advisory firm, announced it would begin offering private investments—such as private equity and private credit—within its Personalized Portfolio programs for 401(k) plan sponsors. Almost simultaneously, the Trump administration unveiled a new housing proposal that would allow U.S. workers to withdraw funds from their 401(k) accounts, penalty-free, to put toward a home down payment. Both moves underscore a growing trend: expanding the flexibility and breadth of retirement accounts, but not without controversy and debate.
According to 401(k) Specialist, OneDigital’s latest offering brings private equity, private credit, and investment strategies from major asset managers—Apollo, Ares, and Blackstone—directly into the retirement portfolios of everyday workers. The firm’s home office investment team will oversee the program, which is designed to "enhance diversification while maintaining liquidity discipline and fiduciary governance." Vince Morris, president of OneDigital Financial Service, emphasized the intent behind this expansion: "Private investments have played an important role in driving outcomes for institutions and sophisticated investors for decades. By thoughtfully bringing these strategies into the workplace through our personalized portfolios program, we’re expanding access in a structured, fiduciary-aligned way with the aim of improved retirement outcomes over time."
All allocations made within the program, OneDigital notes, are subject to rigorous due diligence, liquidity guidelines, and fiduciary review. Plan sponsors retain discretion over whether to adopt these new options, allowing them to align investment choices with the unique needs and risk tolerances of their workforce. In a further step, OneDigital plans to roll out collective investment trusts (CITs) that incorporate private investments starting in the first quarter of 2026.
This move is part of a broader industry push to diversify retirement investments. In 2025, giants like Fidelity Investments, Empower, and Morgan Stanley announced similar initiatives, opening the door to private equity and even cryptocurrency options within defined contribution (DC) retirement plans and IRAs. The Department of Labor’s Employee Benefits Security Administration (EBSA) also stepped into the conversation on January 13, 2026, filing a proposed rule that would clarify fiduciary responsibilities when considering private assets in 401(k) plans. This proposal follows an executive order issued in 2025 by President Donald Trump, which mandated that the Department of Labor and other regulators build a framework to potentially allow alternative investments in retirement plans.
While OneDigital’s announcement focuses on broadening the investment universe for retirement savers, the Trump administration’s new housing plan, reported by NewsNation, targets a different pain point: the struggle faced by Americans trying to afford a home. Under the current system, early withdrawals from 401(k) accounts usually incur steep IRS penalties. The administration’s proposal would waive these penalties if the funds are used for a home down payment—a move intended to help more Americans break into the housing market.
White House economic adviser Kevin Hassett explained the mechanics of the plan: "Suppose that you put 10% down on a home, and then you take 10% of the equity of the home and put it as an asset in your 401(k). Then, your 401(k) will grow over time as the value of your house grows." The logic here is that, by linking home equity to retirement savings, workers could potentially see their 401(k) balances increase in tandem with rising property values.
The proposal comes at a time when homeownership feels increasingly out of reach for many. According to a Realtor.com analysis cited by NewsNation, the average down payment has doubled from $15,000 before the pandemic to $30,000 in 2026. Saving that much now takes families about seven years—twice as long as it did just a few years ago. Allowing penalty-free withdrawals from 401(k)s could, in theory, help families buy homes faster. But there’s a catch: only about 54.4% of Americans have a retirement account, and even fewer have a 401(k), according to data from the Federal Reserve and Congressional Research Services.
Sergio Altomare, CEO of Hearthfire Holdings, a real estate private equity and development firm, told NewsNation that the people most in need of help are unlikely to benefit from the Trump administration’s plan. "There’s still a lot of work that needs to go into addressing affordability for the individuals on the lower rung of the income chain. To me, this will not address that," he said. Altomare pointed out that a worker would typically need to be between 35 and 40 years old with steady employment to have enough saved for the plan to work effectively. "Something like this on the 401(k), on its own, you may increase access for some portion of the population, but we know that a lot of people won’t be impacted," he added.
Critics warn that tapping retirement funds for home purchases is essentially borrowing from one’s future self. Altomare cautioned, "Even if a person accesses their retirement for a down payment, it is essentially robbing future retirement funds—and that has to be made up somewhere down the road." He also emphasized the need for an educational component to help workers understand the risks of early withdrawals, suggesting that limits might be necessary to prevent people from depleting their retirement savings prematurely. "For something like this to really take hold and take shape, No. 1 is it’s got to come with an education component around it. What are the risks? What are the ramifications of hitting your 401(k) early? Maybe adding some limits to it so people don’t deplete it to buy their dream home too soon." As of now, whether such limits will be included remains unclear, with further details expected from President Trump at the World Economic Forum in Switzerland later this month.
The intersection of these two developments—expanding access to alternative investments in 401(k)s and allowing penalty-free withdrawals for home purchases—reflects a broader reimagining of retirement savings in the United States. On one hand, firms like OneDigital are seeking to offer workers more sophisticated investment options, potentially boosting long-term returns but also introducing new complexities and risks. On the other, policymakers are grappling with how to make homeownership more attainable, even if it means workers dip into their retirement nest eggs.
Both initiatives have sparked debate among financial experts, policymakers, and the public. Proponents argue that giving workers more flexibility and choice is a positive step, especially in a world where traditional pensions are rare and personal responsibility for retirement is the norm. Critics, however, worry that these changes could undermine the long-term security that 401(k) plans were designed to provide, particularly for lower-income workers who already face challenges saving for retirement.
As the Department of Labor’s proposed rule winds its way through the regulatory process and as more details emerge about the Trump administration’s housing plan, one thing is clear: the future of retirement savings in America is up for debate. The choices made in the coming months will have lasting consequences for millions of workers trying to balance the competing demands of today’s needs and tomorrow’s security.
For now, workers and employers alike will have to weigh the opportunities—and the risks—of these new approaches, as the boundaries of retirement planning continue to shift in real time.