The father of the 401(k) on the downsides of his most famous creation

Retirement is a fraught subject for many American workers. Longer life spans, the rise of gig work, and soaring inflation are all reasons to make people fret about whether or not they have enough saved up for their golden years.

The death of pensions means that most Americans (if they’re saving for retirement at all) try to put money into their 401(k). About 35% of working Americans currently have 401(k)s, making it the most utilized retirement option, according to a 2020 census report. But that investment vehicle, beloved by employers across the U.S., is still a relatively new invention and a political “fluke,” according to Ted Benna, and he should know—he invented it. 

Commonly referred to as the “father of the 401(k),” Benna told me he has no regrets about creating a plan that has turned so many “spenders into savers.” But he adds that the 401(k) has also turned into something he never intended it to be, particularly when it comes to fees he thought would be covered by employers, and have instead been pushed onto workers. 

“It was never designed to be what it is today,” he told me. “I became very disturbed by what happened with investment expenses.”

Benna also had some ominous warnings about what retirement might look like in the future. 

“We definitely need a healthy economy and robust stock market forever,” he said. “The question is, will we have them forever?”

Read all about what kind of businesses he thinks the 401(k) is really right for, his concerns about tensions between retirees and workers, and what he would do if he had to do it all over again. 

You can read my full interview with him here.

Emma Burleigh
emma.burleigh@fortune.com

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