Years ago, with the amazing John Elway injured midgame, it didn’t seem likely the Broncos could win.  The next day the headline about the backup quarterback who saved the day read, “Gary Who?”  His promised ride even forgot to give the hero of the day a ride home afterward.  These days Gary Kubiak has managed to get people to remember his name.  Let’s try to do the same for Ted Benna.

In 1980 Ted Benna pondered the Byzantine details of the tax code and decided that, while the IRS goal was to limit perks of company executives, he could interpret the obscure 401(k) provision to create a retirement plan for the average worker.  Even better, he had the idea of companies making matching contributions.  36 years later, 94% of companies offer 401(k)s.  Amid endless talk and inaction about saving Social Security, it would be unfortunate to forget that Ted Benna saved the American retirement.  These days, instead of a “defined benefit” pension, which gets redefined down by the lucrative practice of companies going backrupt, most of us have a 401k.  Your 401k is your money in your investments under your control.  It’s not an asset of your employer’s, subject to their continuing existence.  It’s not something the management company can take.  It’s yours.  (True, any matching contributions not yet vested aren’t yours yet, but don’t quibble.)

What does the unsung hero of middle-class savings and investing say?

1. It’s needlessly complicated.  If we’re given too many investing choices we don’t choose any, and the money may sit, instead of making money.  Suggestion:  Find your S&P Index 500 equivalent and use that until you have time to figure out even greater diversification.  See Why Buy Anything But the Very Best?
2. Fees are too high.  Managed funds  have higher fees/lower returns, so look for index funds.  Suggestion:  If the 401k managing company’s fee is high, move your 401k to an IRA when you change jobs or retire.  Meantime, lobby for lower fees.
3. Not everyone uses one.  Less than half of workers participate, choosing by inaction to rely solely on the lucrative, well maintained Social Security system.  Suggestion:  Read Is it Hard to Start Investing?  Save as much as you can, which is more than you think, and increase it every year.  Even if you don’t wind up with “enough” you should wind up with much more than nothing.
4. Many don’t save enough.  Low contributions, no diversification, and cashing out balances.  Suggestion:   Read How Do You Start Investing? to bump up your savings in several ways and use the rule of 72..

Giving Benna the last word:
“The biggest benefit of the 401(k) is it converts them from spenders to savers. It enables them to do something they wouldn’t do on their own.”