Retirement Concerns & Expectations - 64% of Americans surveyed are more worried about running out of money in retirement than dying, and 25% believe they won't ever be able to retire [1] - Roughly 80% of Gen X, millennial, and Gen Z workers believe it will be harder for their generation to achieve financial security than it was for their parents [4] - 70% of U S workers surveyed who have not retired yet considered pushing back their retirement date [22] Social Security & Pension System - Social Security benefits are a major income source for 58% of US retirees [16] - In 1989, 63% of full-time workers at companies with more than 100 employees had a pension, but today only about 15% of private industry workers do [9] - The US Social Security system is facing insolvency within seven years [17] Generational Differences in Retirement Preparedness - Younger workers today often have more in retirement accounts by age 30 than boomers did [6] - 39% of Gen Z, 36% of millennials, and 24% of Gen X have student loans, compared with about 7% of boomers [14] - The top 10% of millennials have 20% more wealth than the top baby boomers at the same age [13] Factors Affecting Retirement - Retirement ages are rising in more than half of OECD countries due to improved longevity and health [2] - Over half of people retire sooner than they ever plan to [3] - Three main reasons younger Americans will likely have to work longer than baby boomers are: longer and healthier lives, Social Security benefits won't cover the full cost of living, and many Americans don't save enough [7]

Market Trends & Regulatory Landscape - The executive order signed last week aims to make it easier for 401(k)s to include alternative investments like private equity and crypto [1][15] - Regulatory clarity and direction from the SEC and DOL are crucial in the coming weeks and months [15][16] Investment Opportunities & Strategies - Defined benefit plans, pension funds, endowments, and foundations have been investing in private assets for 30 years with positive returns [4][5] - Empower has formed partnerships with several alternative managers to provide access to these strategies [6] - The approach is to allocate no more than 15% of assets to private assets, using a collective investment trust or target date type construct with a liquidity sleeve [10] - Defined contribution market could see an allocation to privates between 10% and 20% over the next 10 years, potentially becoming a $4-5 trillion market [14][15] Potential Risks & Considerations - There is a convergence happening between the public and private markets regarding valuations, potentially impacting performance [8] - Illiquidity of private investments raises concerns about accessibility for retirees needing immediate access to funds [8][9] - Fee structures for private alternatives are meaningfully higher than in the public space, and the true returns post-fees need consideration [13][14] Company Performance & Strategy - Empower has 19 million customers and $2 trillion on its platform [12] - Empower aims to provide access to private assets, with the fiduciary (plan sponsor, advisor, and investment consultant) determining timing and strategies [12][13]

401(k) Plan Evolution - 401(k) plans should empower individuals to make their own investment decisions [1] - This shift promotes financial literacy among participants [1] - It also benefits the business overall [1] Traditional 401(k) Shortcomings - Traditional 401(k) systems lacked transparency [1] - Participants were often unaware of the specific investments within funds [1] - Fee structures were unclear [1] - Performance data was not readily accessible [1] Industry Perspective - The industry views this evolution as a positive and overdue step [1]

Industry Overview & Trends - The alternatives industry has grown significantly in the last 15-16 years, becoming more institutionalized with professional management and reporting processes [2] - Private credit may see a boom in an economic downturn due to big lenders' hesitancy and favorable terms for lenders [4] - Technology-focused investments are relatively uncorrelated to macro volatility due to secular trends [5] - Access to private equity is expanding from institutional investors to high net worth individuals and potentially 401(k)s [5][6] - Liquidity is a key issue in alternatives, requiring matching investor liquidity horizons with asset durations [6][7] Market Size & Opportunities - US private equity industry is valued at $3-4 trillion, compared to $8-10 trillion in 401(k)s, highlighting the potential of accessing the 401(k) capital pool [6] - Public markets in technology have approximately 700 companies, while the private market target is 20,000 companies, indicating broader opportunities in private markets [9][10] - A significant portion (20-30 trillion) of the public market value is concentrated in a few companies (the magnificent seven), suggesting diversification benefits in private markets [10] Investment Considerations - Alternative investments can be suitable for regular accredited investors depending on their profile and percentage of exposure [8] - Investing in private markets allows access to a broader range of companies compared to public markets [10]

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The private equity industry has a novel bedfellow in a White House executive order that will pave the way for American workers’ 401(k) savings to go beyond stocks and bonds https://t.co/ipBXyADtog ...

Investment Opportunity - Opening 401ks to private assets aims to provide retirement savers with potentially higher returns and more investment options [2] - BlackRock estimates that adding private market assets could increase returns by approximately 50 basis points (0.5%) annually [2] - This could lead to a potential increase of 15% in 401k plan value over a 40-year period [2] Potential Risks and Concerns - Private equity's inclusion in retirement accounts may lead to increased costs for investors [3] - Private assets are generally less liquid compared to publicly traded stocks and bonds [3] - This illiquidity could make it more difficult for individuals to access their savings quickly before retirement [3] - Assessing and valuing private assets can be more challenging due to limited publicly available information [4] - Greater risk is involved due to the difficulty in assessing and valuing private assets [4]

Retirement Savings - The news relates to 401(k) plans, which are employer-sponsored retirement savings plans [1] News Overview - The document also mentions catching up on all the day's news [1]

Morning Minute: Crypto in Your 401(k)s Is Finally Happening► https://t.co/ZS2NeLxDcA https://t.co/ZS2NeLxDcA ...