Ted Benna immediately knew he had discovered something of value when he finished reviewing the IRS regulations that fateful weekend in 1980. And, although the client he was doing the analysis for rejected the idea, his own firm, The Johnson Companies, didn't and the first 401(k) savings plan with matching employer contributions and employee deferrals became effective January 1, 1981.
Thus began one of the greatest real-life “they laughed when I sat down at the piano” moments. And like the famous and oft-repeated 1926 ad by John Caples, the concept of the 401(k) not only had staying power, but it has proven to be quite successful in its intended purpose. How strong is the concept? Benna's simple idea has been repeated 640,000 times since he convinced his company to start the first 401(k) plan. How successful is the concept? The 401(k) has allowed 60 million employees to accumulate more than $7.8 trillion in assets.
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