Big Changes Coming For 401k Plans In New York

There are major changes coming to 401(k) retirement plans. I had seen a STEEP decline in my account since the beginning of the year. My plan had finally started bouncing back under President Joe Biden from all the damage done during the COVID-19 pandemic. Then came January. My balance tanked again. I thought, based on all the promises made leading up to November, that we would all be swimming in money. That was clearly not the case. It seems like it has been slowly recovering, but time will tell how good this administration will be for working New Yorkers trying to secure their future without relying on Social Security.

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Per CNBC, a New Yorker needs just under $100,000 to retire in the state;

Total expenditures: $70,755
20% comfort buffer: $17,689
Cost of a comfortable retirement annually: $88,444

U.S. News says that the average Social Security payment is approximately $1,979 per month in 2025, which is only $23,748 per year. The maximum Social Security benefit a New Yorker who retires at full retirement age can get is $4,018 per month in 2025 or $48,216 annually. That's still $40,000 less than what is needed to retire comfortably.

Here Is What Is Changing for 401(k) Retirement Plans

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The current administration is in the final stages of allowing 401(k) retirement savings plans to invest in private assets. According to Newsweek, this change would be implemented through an Executive Order, a method the administration frequently employs for governance. This would substantially change what 401(k) plans are permitted to invest in, including private equity, venture capital, real estate, and hedge funds. Not everyone thinks it's a good move for working New Yorkers. Per Newsweek, Jeffrey Hooke, a part-time professor of finance at the Johns Hopkins Carey Business School, told Business Insider,

"Private equity kind of always gets what it wants in Congress, but I think it's a bad idea. It's illiquid, the fees are very high. Private equity funds, for the most part, don't beat the stock market."

We know that this administration makes moves to benefit the wealthy, not the working class, so this is likely to be backed by wealthy supporters looking for additional funding opportunities.

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