Private Equity Is Coming for Your 401(k)

No images? Click here
January 14, 2025

Private equity often gets a bad rap because many people don’t realize just how much capital it controls. It’s a $13-trillion industry that funnels money throughout the economy, often in under-the-radar ways. For example, a private equity firm might be your neighbor’s landlord or be responsible for that overpriced footlong sandwich you ate at Jersey Mike’s last week.

Now, the industry has its eyes on your retirement account — and the collective $12 trillion Americans have invested in defined contribution plans like the 401(k).

Investing in private equity is becoming more common with time, and with the incoming administration, more deregulation could be on the way. But don't get too excited that you might get access to these funds in the near future. They’re not necessarily a better option for your 401(k) allocations than your current strategy.

From 2025 to 2030, the compound annual growth rate (CAGR) for private equity is forecast to be 10%, which underperforms most major forecasts for the S&P 500 in 2025. JPMorgan and Morgan Stanley, for example, see growth of 10.11% this year, while Bank of America sees growth of 12.92%. And while hindsight is 20-20, looking at the major indices’ performances since 2000 provides some context. Over that period:

• The Dow Jones’ CAGR is 10.67%
• The S&P 500’s CAGR is 11.84%
• The Nasdaq-100’s CAGR is 20.66%

So when it comes to retirement savings, it’s important to find the appropriate balance between safety and growth. And just because a shiny new toy once reserved for the rich and famous may soon be available to everyday Americans doesn’t mean they should be jumping at the opportunity. 

— Jordan Chussler, investing and banking editor

P.S. If you got this newsletter from a friend, sign up here for email delivery to make sure you don't miss the next issue.

Money; Getty Images

Older adults who are behind on their student loan payments may soon face harsh consequences for their overdue debts. As many as 452,000 Social Security recipients who have defaulted on federal student loans could be at risk of losing some of their benefits to garnishment by the Department of Education.

Don’t let car insurance premiums drain your wallet. While it’s true that car insurance costs are rising, a few minutes of comparison shopping could save you hundreds every year. Then you could put those extra dollars toward paying off debt — or your dream vacation. Explore providers and see how much you can start saving annually.

Check out our list of the best car insurance providers today!

ADVERTISEMENT

• 🤔 Retirement Requires Reimagining Your Future
• 💰 I Want to Retire in 2025. Am I Financially Prepared?
• 🗓️ Retirement Planning in Your 70s

Inflation

Inflation isn't as bad as it was in 2022, but if you’re buying these items, you should brace for higher costs this year.

Money; Getty Images

Debt Management

Debt consolidation can help you get multiple debts under control at once. But how much of a factor is your debt-to-income ratio?

Carlos Gawronski

Insurance

Despite mixed evidence about the effectiveness of video doorbells in preventing crime, some insurance companies offer discounts for them.

Getty Images

This newsletter is free because Money earns a commission when you click or make purchases from the links in this email and on our site. We also receive compensation for some of the products and services featured in this message. Offers may be subject to change without notice. Learn more about how we make money.

Privacy Policy • Advertise With Us • We're Hiring!

To stop receiving these emails, unsubscribe or manage your email preferences.

Copyright ©2025 Money Group, LLC. All rights reserved.

Metro Office Park Calle 1, Building 7 Suite 204, Guaynabo, Puerto Rico 00968, USA