197: Inventor Of 401(k), Ted Benna Joins Us

I dislike 401(k)s. They REDUCE your income. Sound investments INCREASE your income. Most people simply do not realize that there are alternatives to “defined contribution” retirement plans like 401(k)s, 403(b)s, 457s, IRAs, and Canadian RRSPs. Societal belief systems condition you into “Salary Reduction Plans” – which is, in fact, an early name of the 401(k)! The man credited as the “Father” and “Inventor” of the 401(k), Ted Benna, joins us today. He created and gained IRS approval of the first 401(k) savings plan. Even Ted laments that they should be “blown up”. They are not serving participants in the way they were intended. Ted & I discuss alternatives to 401(k)s. Personally, I don’t invest in 401(k)s. Admittedly, I used to, succumbing to poor financial education and societal conditioning. They’re not designed to begin paying you until between age 59.5 and 70.5. That’s a “life deferral plan” – awful.

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02:09 What exactly is wrong with a 401(k).
06:45 Replace your “Salary Reduction Plan” with a “Salary Increase Plan”.
08:02 Similar plans like 403(b), 457, IRA, Canadian RRSP.
09:30 Ted Benna Interview begins. 1980 roots.
12:45 Reducing employee wages.
13:37 Benefits and drawbacks of 401(k)s.
18:51 Fees.
25:43 Why 401(k)s should be “blown up”.
32:02 Comparing “Get Rich Education” vs. “401(k)”.
34:44 What does Ted Benna do today?
36:01 My summary.