Ted Benna, widely recognized as the creator of the 401(k) retirement plan, has introduced a new savings initiative named Radish. Benna, at 84 years old, believes the current 401(k) system has become too complex and costly for many workers, especially those in lower-income brackets. While 401(k) plans have helped approximately 70 million American workers accumulate $10 trillion and generated $39 billion in revenue in 2023 for the financial ecosystem, Benna suggests they have not adequately served lower-paid employees. According to the US Bureau of Labor Statistics, over two-thirds of private-sector workers have access to 401(k)-type plans, but only half of those eligible participate.
Radish is an employer-funded incentive program that aims to address these shortcomings. Instead of requiring employee contributions or matching them, companies deposit money into an account for workers who meet performance goals such as safety, tenure, or on-time delivery. This structure is intended to give employees, particularly those not highly compensated (earning less than $160,000 in 2025), a reason to stay with the company and improve productivity. The plan is technically a version of a 401(a) profit-sharing plan, which has existed since the 1950s, and is designed for employers to avoid payroll tax on these rewards as contributions don't pass through payroll.
Benna emphasizes that improved short-term financial security is crucial for lower-income employees, stating it is "more important than larger Social Security benefits 10 to 30 years from now." The Radish accounts grow tax-free until withdrawal and are designed to function as tax-advantaged emergency savings. While Benna and his team are working with a North Carolina private school, an Oklahoma retail operation, and a trucking firm for pilot programs, no large insurers or 401(k) recordkeepers have yet signed on. Alicia Munnell, senior adviser at Boston College's Center for Retirement Research, raised concerns that such rewards might come at the expense of higher wages and noted that Radish incentives are not counted as income for Social Security benefit calculations, which could negatively impact lower-income workers' future benefits.
