Black America has never lacked brilliance, work ethic, or ambition. What we have lacked is access—access to the financial tools that turn decades of work into generational wealth.
Today, we stand at a new frontier of empowerment—one that policymakers can unlock by modernizing our retirement system. By expanding the range of investments available in workplace 401(k) plans, particularly for Black workers and Black-owned businesses, we have the chance to transform retirement savings into a powerful engine for closing the wealth gap.
Imagine this: a Black-owned business offers its employees not just a basic retirement plan but one that includes access to higher-yield private market investments—private equity, infrastructure, real estate, and credit. Those employees can grow their retirement savings faster. At the same time, Black-led investment firms gain new capital to deploy into Black-owned businesses that have been systematically overlooked by banks and excluded from public markets. This is the kind of ecosystem shift that creates generational change.
Workers will be able to diversify their retirement, while private funds run by Black men and women will have more capital to use to invest in Black-owned businesses. In 2022, only three percent of U.S. businesses were Black owned. Of those businesses, “97% have less than 20 employees, and three-in-four have fewer than five employees.”
Private market investments provide the capital needed to keep the Black community moving forward. And workers are ready: According to the Schroders 2025 US Retirement Survey, 45% of investors participating in workplace retirement savings plans like a 401(k) said they would invest in private markets if given the option, and 77% said they would even increase their retirement contributions. For Black workers—whose businesses are often smaller and locked out of traditional financing—this is the doorway into prosperity that has been shut for too long.
The racial wealth gap remains staggering: while the median white household holds $285,000 in net worth, Black households average just $45,000. This is not an accident of fate. It is the predictable result of financial exclusion. Fortunately, a policy initiative is currently being proposed that would provide more investment options for Black businesses to offer their employees. Those employees would be able to invest a small portion of their retirement in private market investments and achieve after-fee returns that surpass public investments. This will be a boon for building generational wealth.
Jumping into a new type of investment can be frightening. Humans are naturally fearful of uncertainty. But rest assured, protections for retirement savers do not go away with the addition of private investments—they remain in full force. The Employee Retirement Income Security Act (ERISA) employs strict fiduciary standards of loyalty and prudence that compel asset managers and employers to conduct proper due diligence in selecting 401(k) offerings for employees.
The most recent administrative action on private market investments in 401(k)s “does not alter ERISA’s uncompromising fiduciary standards.” The Department of Labor’s commitment to a new rulemaking will bolster these protections for retirement plans that include private market investments. According to the Council of Economic Advisers, “retail investor access to private equity through defined contribution plans can result in a GDP benefit of up to $35 billion, or 0.12 percent of GDP.” This will deliver the greatest benefit to younger, minority workers.
Some critics might also blame these investments for opacity, but they are misinformed. Valuation concerns are overblown. Federal law requires 401(k) assets to be valued at fair market value. Rules and regulations already in place will provide more transparency for private investments and ensure private sector employees understand the full value of their retirement funds. According to the Committee on Capital Markets Regulation (CCMR), valuation of private equity funds “should not present a problem.” The most recent paper explains that “private equity exposure can still report a daily net asset value by simply relying on the most recent valuation information available for the private equity investment.”
Independent valuations of private market investments are feasible for refining valuations. One academic paper explains that investors can glean more insight into their investments by looking at “the history of reported valuations.” Transparency will still be abundant if Black businesses decide to incorporate private market investments in their 401(k) plans.
The future of Black America will not be built on protest alone. It will be built on policy, on capital, and on ownership. Retirement innovation is not a technical adjustment—it is a historic opportunity to close the wealth gap, strengthen our businesses, and ensure that the brilliance of Black work translates into the dignity of Black wealth.
