Ted Benna -- also known as the father of the 401(k) -- is a decidedly un-Wall Street guy. He grew up on a Pennsylvania dairy farm.
"My dad did a great thing for me there," he tells Marketplace. "I had my own cow when I was seven years old, and we got paid a little money from that."
Hard work and thrift is Benna's answer to a world full of stuff to buy. He spent his career planning people's retirements. So I figure hey, I'll show him my 401(k) papers and get some free advice.
"It appears you get a dollar for dollar match," he asks. "Is that right?"
A bit of small talk yields quickly to a lecture. It turns out I'm drowning in fees.
Benna: "You're in investments that are more expensive."
Tong: "You talking about the fees?"
Benna: "That you don't see."
Benna has one main beef with the system -- it's too complicated.
"And you have 1, 2, 3, 4...."
In my case, 20 investment choices is too many. But wait, isn't this the guy who started the whole system in the first place?
"Hey, if I were starting over from scratch today with what we know, I'd blow up the existing structure and start over," he says. "What I'm talking about isn't 401 (k). I'm talking about the way investing is done."
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The backstory of the 401(k)
What's he mean? To understand, let's back up, to the accidental rise of the 401(k) -- to the 1960s and 70s. Back then, if you worked for a big company and retired, you got a pension. A regular check.
Benna helped run these plans. He was a consultant. And in the late '70s, he was unhappy.
"Most of what I was doing was working with business owners," he says. "Their main interest was, 'how can I get the biggest tax break, and give the least to my employees, legally?'"
Then, Benna says inspiration came from two different places: God (he's a religious man) and the Internal Revenue Code. It was 1978. Congress passed an obscure add-on to tax code section 401.
"Added this little paragraph 'k'. And I still have, you know, the original copy. It was only a page and a quarter long. That's all it was."
401(k) was an unassuming tax break for companies letting workers put away cash on the side. Only the tax nerds noticed... until divine inspiration hit Benna.
"Hmm. Well, how about adding a match, an additional incentive? Immediately, I jumped to, 'Wow, this is a big deal!'"
His concoction was effectively a bribe for workers: they got extra money from the boss and a tax break, if they took some of their own paycheck and set it aside for retirement.
"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."
Benna had a hunch 401(k)s would take off. Indeed they did, in the early '80s.
The rise of the 401(k) and the fall of pensions
Big companies offered them first, and in the meantime started ditching pension plans, which were expensive. And before long, "401(k) became very popular for little companies to have, that never had any retirement program," Benna said.
Thus began the era of make-your-own-retirement. The American worker now faced a new choice: Spend my whole paycheck? Or take the employer match/bribe, and start saving? It made for some tension.
"Now you go home to your spouse. And she says, 'Are you nuts? I mean look, the end of the month. We got nothing left. I mean, how are you going to put six percent of your pay in?' But you say, 'Well look, my company is going to give me three percent! I'm crazy if I don't do this!'"
By the mid '90s, 30 million Americans had 401(k) plans. Do-it-yourself retirement seemed easy in the decade's bull market.
Median 401(k)/IRA balances, by age group. (Source: Center for Retirement Research, Boston College)
"Unfortunately, the worst thing that happened with this wretched market is too many had the highest stock ownership that they ever had at the wrong time," Benna says.
Today, the typical middle-class household nearing retirement has saved $120,000 -- one-tenth what many say it needs.
Bull markets: Dow Jones Industrial Average (Source: Federal Reserve Bank of San Francisco)
And for all the 401(k) growth, half of American workers still have no plan.
There's the top...and the bottom
Has the system failed us? I asked Ted Benna that. He's thought a lot about it. It's almost like his creation got overtaken by events. He never meant for the explosion in confusing investment choices. The original plans offered two.
"We didn't need to talk about large-cap, small-cap, value, growth, emerging-markets, on and on and on," Benna says. Back then, "the employer picked a mutual fund. And it was typically Fidelity Magellan or Windsor Fund at Vanguard."
It was never Benna's idea for do-it-yourself to replace pensions. It just kind of happened.
Benna: "This is kinda the whole enchilada."
Tong: "So what's your thought on it now having become the whole enchilada?"
Benna: "Well, it's not good, but it's reality.
Benna says the 401(k) was never meant to take care of everyone. It was simply a financial product that took off. And it did help middle-income Americans, tens of millions of them.
"What makes the U.S. different [now]," he says, "and has historically, is a strong middle class. Doesn't matter what your society is. You're always going to have your top. And you're going to have plenty on the bottom, unfortunately. The key is, what is going to be in the middle and what financial condition are they going to be in?"
And if the 401(k) has done anything, creator Ted Benna argues it's forced thrift into household economics.