AFFILIATE DISCLOSURE: This article contains affiliate links. If you open an account or make a purchase through a link on this page, Golden Future Vault may earn a commission at no extra cost to you. All opinions are our own. See our full disclosure policy.
For decades, saving for retirement had a simple formula. Put your money in stocks and bonds, let it grow, and hope the market cooperates.
That worked well for a long time. But lately, a lot of retirement savers are asking a new question: Is that still enough?
Prices have risen fast. The national debt keeps climbing. More people are looking beyond stocks and bonds, toward a different category called alternative investments.
This guide explains what traditional and alternative investments are, how they compare, and what the differences mean for someone trying to protect their retirement savings.
Not sure where to start? Download our free Retirement Diversification Checklist. It compares nine types of investments side by side. Then it gives you a short worksheet to fill in, so you can see where you stand before you change anything in your portfolio.
What Are Traditional Investments?
Traditional investments are the ones most people already own inside their 401(k) or IRA. There are three main types.
Stocks
When a company wants to raise money, it can sell small pieces of itself to the public. Those pieces are called stocks or shares. When you buy a stock, you own a tiny slice of that company. Think of it like owning one square foot of a house that thousands of other people also own a piece of.
If the company does well, your slice becomes more valuable. If it struggles, your slice loses value. Stocks have grown a lot over long periods of time, but they can also drop quickly. Many retirement savers watched their accounts fall roughly 37% during the 2008 financial crisis.
Bonds
A bond works like a loan. You lend money to a company or a government. In return, they pay you interest over time and give your money back at the end of a set period.
Bonds are usually seen as safer than stocks, but they are not risk-free. When interest rates go up, the value of existing bonds tends to go down. That hurt many investors in 2022, when both stocks and bonds fell at the same time.
Cash and savings accounts
This includes regular savings accounts, money market accounts, and short-term government securities. Cash and savings usually do not swing in price the way stocks and bonds can. However, if prices are rising faster than the interest you earn, your money loses buying power over time. If your account earns 2% per year but prices go up 4%, you are slowly falling behind.
Stocks, bonds, and cash are the main investments in most retirement plans. They are widely available and usually easy to buy and sell. They respond differently to economic conditions. However, as 2022 showed, there are times when stocks and bonds can both lose value at the same time. Some investors add alternative assets because they may behave differently from traditional investments during those periods.
What Are Alternative Investments?
Alternative investments are assets outside of stocks, bonds, and cash. The word alternative just means it is a different category.
Here are the ones most relevant to retirement savers.
Precious metals: gold and silver
Gold has been used to store value for thousands of years. Unlike paper money, governments cannot print more of it.
Gold does not always move in the same direction as stocks. In 2022, when stocks fell sharply and bonds also declined, gold finished the year roughly flat, up about 0.4% in U.S. dollars according to the World Gold Council. During the 2008 financial crisis, gold held its value while the broader stock market fell. But gold is not a reliable inflation hedge every single year. In some inflationary periods it performs well, and in others it does not.
Silver behaves similarly to gold but tends to have larger price swings and is also tied to industrial demand.
Both gold and silver can be held in physical form, such as coins or bars, or inside a special retirement account called a Gold IRA.
Real estate
Real estate means owning property, such as a home, an apartment building, or commercial space. You can also invest in real estate without buying a building, through something called a REIT, or Real Estate Investment Trust. A REIT works similar to a stock, but instead of owning a piece of a company, you own a piece of a group of properties. REITs can be bought and sold just like stocks and are available in regular IRAs.
Real estate can provide income and may keep up with inflation over long periods, though it can also lose value and is generally harder to sell quickly than stocks or bonds.
Cryptocurrency
Cryptocurrency is digital money that uses computer technology to keep records and verify transactions, rather than a central bank. Bitcoin is the most well-known example. Ethereum is another.
Some people see cryptocurrency as a new kind of store of value, similar in spirit to gold. Others see it as closer to speculation than investing.
Opinions on crypto as a retirement asset are genuinely divided. What most people agree on is that its price swings a lot. It is not unusual for the price of Bitcoin to rise or fall 50% or more within a single year. That kind of swing is hard to absorb in a retirement portfolio.
Some IRA custodians now allow certain cryptocurrencies, which means you can hold them with a tax advantage. But the rules and risks are complex, and it is worth doing careful research and speaking with a financial advisor before adding crypto to a retirement account.
Private credit and private equity
These involve investing in businesses that are not listed on a public stock exchange. With private credit, you are lending money to a private company. With private equity, you are buying a stake in one.
These options have become more accessible to individual investors through online platforms in recent years. However, many of these offerings are still limited to accredited investors, meaning people who meet income or net worth requirements set by the Securities and Exchange Commission (SEC). They also come with meaningful risks worth understanding before investing. They are harder to sell if you need your money back, fees can be higher, the investments can be difficult to value, and some have long holding periods.
Collectibles and artwork
This category includes things like rare coins, vintage wine, classic cars, fine art, and sports memorabilia. These items can increase in value over time, sometimes significantly.
The challenge is that doing well with collectibles usually requires real expertise in what you are buying and selling. It is easy to overpay for something, or to own something that sounds valuable but is hard to sell when you need to.
Some platforms have made artwork more accessible. For example, a company called Masterworks lets investors buy fractional interests in paintings rather than purchasing an entire work. This lowers the cost of entry, but the investment can still be hard to sell and risky, and returns depend on what the artwork eventually sells for.
For most retirement savers, collectibles should be a small piece of a larger portfolio at most, not a core holding.
How These Investments Compare
Each of the investment types above behaves differently when it comes to four key questions. How easy is it to sell? How much does it usually take to get started? Where can you hold it, inside a retirement account or outside one? And how much work does it take to own?
The answers are not always simple, and they vary a lot across different types of alternatives. We put the full side-by-side comparison into our free Retirement Diversification Checklist so you can reference it in one place.
Download the Retirement Diversification Checklist to see the full comparison table. The second page is a worksheet that helps you think through whether any of these investments might fit your situation.
Why Retirement Timing Matters
A 30-year-old can afford to wait out a bad market. If their account drops 40% today, they have decades to recover.
A 60-year-old does not have that same runway.
Here is the concern. If your retirement account drops sharply right when you start taking money out, you may never fully bounce back. Picture this: a $500,000 account drops 40%, leaving you with $300,000. If you are also taking out money to live on, you are drawing from a smaller pot while it is still down. Even if the market eventually recovers, your account may not get all the way back.
Some investors add alternative assets to their portfolio because they want something that does not always move in the same direction as stocks. Gold is one example. As noted above, it held its value in both 2008 and 2022, two periods when stock investors were hit hard. Gold does not always behave this way. But during some periods, its different performance from stocks has provided diversification.
The goal is not to replace stocks and bonds. It is to add something that may behave differently during rough patches.
How Retirement Savers Can Hold Alternative Investments
Here is how retirement savers can hold some of these investments in practice.
Buying physical gold or silver
You can buy gold or silver coins and bars directly from dealers like Money Metals Exchange. You store them yourself or in a secure vault. This is straightforward, but you get no tax benefit. The metals sit outside your retirement accounts.
A Gold IRA
One way to hold physical gold or silver within a tax-advantaged retirement account is through a Self-Directed IRA, sometimes called a Gold IRA.
A Self-Directed IRA is a retirement account, similar to a regular IRA or Roth IRA, but it can hold assets beyond stocks and bonds. The IRS allows certain qualifying gold and silver to be held inside these accounts.
There are three separate roles in a Gold IRA setup, and it helps to understand them.
The custodian is a financial institution that holds the account and handles the paperwork. They are required by IRS rules.
The precious metals dealer is the company that sells you the actual gold or silver. Companies like Goldco, Birch Gold Group, and Noble Gold typically act as dealers and help you through the setup process, but they are not the same as your custodian.
The depository is the secure facility where the metals are stored on behalf of the IRA’s trustee or custodian. You cannot store qualifying metals at home and have them count as part of your IRA.
Here is how the process typically works.
First, you open a Self-Directed IRA with a custodian that allows precious metals. Second, you fund the account through a transfer from an existing IRA or a rollover from a 401(k). A properly executed transfer or rollover generally does not trigger income taxes, but rollover rules can be complicated and mistakes can have tax consequences. It is worth understanding the rules before you move money. Third, you choose gold or silver that meets IRS requirements. Not all gold coins or bars qualify. Fourth, the IRA purchases the metals and they are sent to the designated storage facility.
Real estate through REITs
If you want some real estate exposure without buying property, REITs can be held in a regular IRA or brokerage account. No special setup needed. They trade like stocks and pay regular dividends.
Private investment platforms
For investors who meet eligibility requirements, some online platforms offer access to private loans and real estate funds. These can be hard to sell and hard to value, and fees can be higher. They are worth reviewing carefully
What Is Happening in Washington
One reason more people are paying attention to alternatives is a shift in federal policy.
In August 2025, President Trump signed an executive order directing federal agencies to reconsider rules and guidance that affect retirement savers’ access to alternative assets in 401(k) plans. In March 2026, the Department of Labor proposed new rules that would address how plan managers could evaluate alternative investments. The Securities and Exchange Commission (SEC) has also been examining how more everyday investors are gaining access to private markets.
These changes are still unfolding. They do not mean everyone should move money into alternatives. But they do suggest the conversation is no longer limited to institutions and very wealthy investors.
How Much Should You Put in Alternatives?
There is no standard percentage of alternative investments that is right for everyone. The right amount depends on the type of investment, your timeline, your other assets, how much income you need, how quickly you might need your money, and your comfort with risk. Some people may not need alternatives at all.
Risk tolerance is worth thinking about separately from your timeline. Some people are comfortable watching an investment lose 30% of its value and waiting it out. Others find that kind of drop very hard to sit with, even if they have years to recover. An investment with big price swings, like cryptocurrency, may not be a good fit even for someone with a long time horizon, if they would feel pressure to sell during a downturn. An investment you could not hold through a rough stretch may not be a good fit for you, even if it looks promising.
Rather than starting with a percentage, it helps to think about what you want an alternative investment to do in your portfolio. Then consider its risks, costs, how easily you can get your money back, and honestly, how you would feel if it dropped sharply before recovering.
The worksheet in our free Retirement Diversification Checklist walks you through these questions before you talk to a financial advisor or start doing more research. Download it free here.
Free Download: The Retirement Diversification Checklist
We put together a free two-page guide to help you think through this decision.
Page 1 compares nine investment types side by side. It shows how easy each one is to sell, what it usually takes to get started, where you can hold it, and how much work it is to own.
Page 2 is a worksheet about you. You fill in how many years you have, what you own now, how much you could leave alone for years, and how you would react if an investment lost 30%. Then you think through what job a new investment would do and where you would hold it.
The checklist does not tell you what to buy. It helps you figure out what questions to bring to a financial advisor, or where to focus your own research.
Download the Free Retirement Diversification Checklist
No spam. Unsubscribe anytime.
The Bottom Line
Stocks, bonds, and cash are still the backbone of most retirement plans. They are simple to understand and widely available.
At the same time, 2022 was a reminder that traditional investments can all struggle at once. Gold, real estate, crypto, and other alternatives do not move in lockstep with U.S. stock markets, though each comes with its own risks and can lose value too.
For some retirement savers, certain alternative investments may add diversification because they behave differently from stocks and bonds. For others, the extra cost and the trouble of selling quickly may outweigh that benefit.
The right choice depends on your goals, your timeline, and what you can afford to have tied up or at risk. A qualified financial advisor can help you work through that.
Download the Retirement Diversification Checklist
RISK DISCLOSURE: Investing in precious metals and other alternative assets involves risk, including the possible loss of principal. Past performance does not guarantee future results. Gold, silver, and cryptocurrency prices can go up or down significantly. Self-Directed IRAs come with added fees and rules. This article is for informational purposes only. It is not financial, tax, or legal advice. Please speak with a qualified financial advisor before making any investment decisions.