Private Credit Pushes Into 401(k) Plans, Targeting Trillions in Retirement Savings

Centerbridge Partners is the latest Wall Street firm to chase a piece of America’s massive 401(k) market, joining a growing wave of private credit managers who see your retirement account as their next big opportunity. The firm has joined a growing chorus of alternative asset managers advocating for the inclusion of private credit strategies in U.S. retirement plans, citing the asset class’s income-generating potential and evolving liquidity structures.1 With trillions of dollars at stake and a presidential executive order paving the way, the race is on to reshape how everyday Americans invest for retirement.

Why Private Credit Firms Want Your 401(k)

The math is simple. The $14 trillion market for U.S. defined-contribution retirement plans has become a prize for buyout firms, which see the steady growth of this pool as a potential source of returns.2

Private credit funds lend money directly to companies outside the traditional banking system. They typically offer higher yields than public bonds and often use floating interest rates that rise with inflation. That combination has made the asset class wildly popular with pension funds, endowments and insurance companies for years.

The U.S. private credit market expanded from $500 billion to $1.3 trillion over the last five years and is poised for continued growth in 2026.3 Globally, the size of private credit at the start of 2025 was $3 trillion, and it is estimated to grow to approximately $5 trillion by 2029.4

Now, firms want everyday workers to join the party. Speaking to Bloomberg Television, Jeff Aronson, co-founder and managing principal of Centerbridge, said he sees a real place for private credit in 401(k) portfolios, particularly as investor education and product design continue to improve.1

Centerbridge is far from alone. Here are the major players already making moves:

• Apollo Global Management CEO Marc Rowan has talked about developing products for 401(k)s. State Street Global Advisors launched target-date funds with exposure to private markets.5
• Empower, the country’s second-largest provider of workplace retirement plans, announced a partnership with private investment fund managers to offer investments through collective investment trusts.5
• Goldman Sachs Asset Management launched the Goldman Sachs Collective Trust, a Private Credit Fund.5
• Blackstone created a new group focused on developing funds for retirement accounts.5

Apollo, Carlyle and KKR have all recently hired veterans from the retirement and fund industry. Over the past decade, smaller private equity firms have acquired more than 900 independent firms that provide retirement and wealth management services.2

private credit firms targeting 401k retirement plan investments 2026

Trump’s Executive Order Changed the Game

A major reason this push is accelerating sits in the White House. On August 7, 2025, President Donald Trump issued an executive order directing federal agencies, particularly the Department of Labor, to expand access to alternative investments for participants in 401(k) plans. These alternative investments include private equity, private credit, real estate, and digital assets such as cryptocurrency.6

The executive order represents a significant shift in federal policy, aiming to broaden access to alternative assets within 401(k) plans.6

The order instructed regulators to review fiduciary guidelines under ERISA, the 1974 law that governs retirement plans. The executive order begins a regulatory review process, meaning that any substantive changes to retirement plan investment options will take time to implement. New investment options such as private credit may not be available until 2026 or later, depending on how quickly regulators act.6

Industry insiders believe the dominoes are falling. “In 2026, we’re going to start seeing more of this come into play, more than just the interval funds,” said Cheryl Nash, president of APL at InvestCloud. “And towards the end of the year in 2026 and early 2027, I think we’ll really see this take hold.”5

New funds featuring private assets are being launched, and some in the industry are working to seed established ones with alternative investments. Executives predict that 2026 might just be the year their long campaign starts paying off.2

How Private Credit Could Enter Your Retirement Account

Most experts agree that private credit will not show up as a standalone option on your 401(k) menu. Instead, it will likely be blended into funds you already use.

The three most discussed structures are:

The Goldman Sachs Private Credit CIT provides access to private credit investments for defined contribution plans through a structure built specifically for retirement portfolios. It is designed to offer access to a broad mix of private credit investments alongside a liquidity sleeve intended to support certain daily liquidity requirements.7

About 48% of plan sponsors consider multi-asset strategies to be the optimal approach to enhance participant outcomes, suggesting preference for integrated rather than standalone private market products.8

For mid-career workers, those with 15 to 20 years until retirement could hold 8 to 12% in private credit and infrastructure. Near-retirees with 5 to 10 years until retirement would typically reduce private asset exposure to 3 to 5%.8

The Risks That Could Hurt Retirement Savers

Not everyone is cheering. Some of the sharpest minds in retirement policy are sounding alarms.

As far as one critic sees it, the only party pushing for private equity in 401(k) plans is the private equity industry itself. Moreover, private equity comes with numerous negatives, and studies on the performance of state and local pension plans show that the addition of private equity has not increased the return or reduced the volatility in these plans.9

The core concerns include:

• Liquidity risk: Private credit loans do not trade daily. If too many workers try to cash out during a downturn, funds could freeze withdrawals. Blackstone’s flagship BCRED fund saw record redemptions of $3.8 billion in the first quarter of 2026, far exceeding its 5% quarterly buyback limit.10
• Hidden stress: While the headline default rate in private credit has remained below 2% for several years, once selective defaults and liability management exercises are taken into account, the “true” default rate approaches 5%.11
• Sector concentration: Reports indicate that roughly 40% of private credit loans are tied to software companies,12 making the entire asset class vulnerable to a tech downturn.
• Fee burden: Goldman Sachs is charging a fee of about one percent of assets for its new retirement-focused private credit fund, inclusive of administrative expenses,13 which is significantly higher than the index fund fees most 401(k) savers pay today.

Former Goldman Sachs CEO Lloyd Blankfein recently delivered a blunt warning. Speaking on a Bloomberg podcast, Blankfein said “the financial system appears to be inching toward another potential catastrophe with everyday Americans exposed to some of the losses.” He added that the assets at issue “can be hard to analyze, may feature hidden leverage and can become tough to sell.”10

Key Question for Every Worker: Do you truly understand what private credit is and how it behaves during a recession? If not, you should ask your plan administrator before any changes hit your default fund.

What Workers and Plan Sponsors Should Do Now

Plan sponsors and fiduciaries should begin preparing for upcoming regulatory changes by carefully reviewing their fund structures, compliance processes, and fiduciary documentation.6

For everyday workers, here are practical steps to protect your retirement:

1. Check your target-date fund. If your plan adopts private credit sleeves, your default fund could change without you noticing.
2. Ask about fees. Even a 0.5% increase in annual fees can cost tens of thousands of dollars over a 30-year career.
3. Understand the lock-up. Know whether your fund has redemption limits before you need the money.
4. Read the fine print. Look for terms like “interval fund,” “tender offer” or “private credit allocation” in plan updates.

Three tests will define whether private credit wins a durable place in 401(k)s. First, can managers deliver fair, timely valuations during stress? Second, will fees come down as scale builds? Third, can communication help workers understand what they own?14

The push to put private credit inside your 401(k) is not a distant possibility anymore. It is happening right now, backed by some of the biggest names in finance and a White House eager to cut the red tape. Whether this ends up being a genuine opportunity for working Americans or a new way for Wall Street to collect fees on your nest egg will depend on how well regulators, plan sponsors and you, the saver, hold these firms accountable. Your retirement is too important to let someone else make this decision for you.

Drop your thoughts in the comments below and let us know where you stand on this debate.