On January 20, 2026, two high-profile moves shook the world of retirement planning and housing policy in the United States. OneDigital, a financial advisory firm, unveiled plans to incorporate private equity and private credit into 401(k) portfolios, a strategy designed to expand investment opportunities for American workers. At the same time, the Trump administration announced a proposal allowing workers to withdraw funds from their 401(k) accounts without penalty to help finance a home purchase, further changing the landscape of retirement savings.
The first initiative, driven by OneDigital, introduces new private investment options to 401(k) plans. The firm’s Personalized Portfolio program will now offer private equity and credit, with the backing of major asset managers like Apollo, Ares, and Blackstone. Vince Morris, president of OneDigital Financial Service, emphasized that this move aims to improve long-term retirement outcomes by diversifying investment strategies and bringing the benefits of private investments to the workplace. OneDigital plans to implement collective investment trusts (CITs) incorporating private investments starting in the first quarter of 2026, which could offer even greater flexibility for plan sponsors and participants.
Penalty-Free Withdrawals for Home Purchases
Simultaneously, the Trump administration introduced a proposal designed to ease the financial strain of homeownership for American workers. Currently, early withdrawals from 401(k) accounts are subject to steep IRS penalties, but under this new plan, these withdrawals would be allowed without penalty for use as home down payments. White House economic adviser Kevin Hassett detailed the plan, explaining that the home equity could be linked to a worker’s 401(k), enabling the account to grow as the value of the home rises over time.
As the housing market continues to challenge prospective homeowners, particularly with average down payments doubling since the pandemic, this initiative aims to make it easier for workers to enter the housing market. However, the proposal raises concerns about the potential consequences of depleting retirement savings early. Critics argue that such withdrawals could compromise long-term financial security for those relying on their 401(k)s for retirement, warning that it essentially “robs” workers of future funds. While the plan may help some workers access homeownership, it may leave others—especially those without substantial savings—behind.
Experts have expressed mixed reactions to both of these proposals. The move to offer private investments through OneDigital is part of a larger trend to diversify retirement savings, following similar announcements from major investment firms like Fidelity and Morgan Stanley in 2025. However, this expansion into more complex investment options is not without its risks, particularly for lower-income workers who may lack the expertise to navigate these new financial products. On the other hand, while the housing proposal may make homeownership more accessible, it could exacerbate the issue of income inequality, as the majority of Americans still lack a retirement account to draw from.
Sergio Altomare, CEO of Hearthfire Holdings, stressed the need for caution with such plans, particularly for workers in the lower-income brackets. “This will not address the affordability issues for the most vulnerable,” he said, noting that only those with substantial savings will benefit from these proposals. Altomare also pointed out that educational efforts around the risks of early 401(k) withdrawals are essential to help workers make informed decisions about their financial futures.
As these initiatives move forward, both the OneDigital investment strategy and the Trump administration’s housing proposal are likely to reshape the future of retirement planning and homeownership in the U.S. However, the debate continues over the balance between offering flexibility and protecting the long-term security of American workers’ retirement funds.
