A Brief History Of: The 401(k)

摘要

Forget about rescuing banks or unfreezing credit markets. The question on most minds amid the recent market chaos: What does this mean for my 4or(k)? With some $3 trillion invested, these plans are the most popular retirement-savings vehicle in the U.S.-and account for a big chunk of the $2 trillion the crisis has wiped from American nest eggs. The 401(k) plan-named for a section of the Internal Revenue Code-came about thanks to a 1978 congressional provision intended to offer taxpayers breaks on deferred income. In 1980, while trying to streamline a client's profit-sharing plan, benefits consultant Ted Benna realized that the code could be used to create an easy, tax-friendly vehicle for employees to save for retirement. The client passed, but the idea took off: there are now more than 65 million 401(k) accounts, which allow participants to invest in stocks and bonds, often with matching funds from employers-all at a lower cost than the pension plans that 401(k)s replaced. The accounts helped spark a financial-industry boom, funneling billions from under retirement savers' mattresses into mutual funds and the stock market.