Ted Benna's New 'Radish' Plan Fixes What the 401(k) Broke

Ted Benna co-created the 401(k). He watched it grow into a $15 trillion retirement savings engine. And now, per a recent Bloomberg Podcasts interview, he's basically saying: yeah, it didn't work for everyone, and here's the receipts.

Benna's new plan is called Radish, and it's built for the workers that traditional 401(k)s quietly forgot: middle and low-income employees who can't afford to lose a chunk of each paycheck to a deduction, no matter how good the employer match looks on paper. The core mechanic is simple and genuinely clever. Radish is entirely employer-funded, so employees don't have to contribute a single dollar. The employer gets a FICA tax savings on contributions, which partially offsets the cost of funding the plan. Everyone kind of wins, at least on paper.

Here's where it gets interesting and a little spicy. Radish also lets employees dip into the funds early for short-term emergencies, think car repairs or medical bills, with a 10% penalty on early withdrawals. That sounds punitive, but compare it to the alternative: payday loans, credit card debt at 28% APR, or just not fixing the car and losing the job. Suddenly 10% looks almost generous.

The backdrop here matters. Morningstar's recent retirement planning content for singles flagged a structural problem that Radish is also bumping up against: single adults now represent 38% of US adults aged 25-54, up from 28% in 1990. These are people with no partner income to fall back on, no shared emergency fund, and often no access to a 401(k) that actually fits their cash flow reality. The retirement savings gap isn't a future problem. It's already here.

The bear case on Radish is obvious: employer-funded means employers have to actually fund it, and in a labor market where AI adoption is quietly suppressing hiring demand (as flagged in Bloomberg's jobs preview, with payrolls estimates as low as 50,000 for July), convincing CFOs to voluntarily add a new balance sheet liability is a tough sell. Benna's original 401(k) worked because it was good for companies first. Whether Radish clears that bar is still an open question.

The man invented the product that changed American retirement. If he says it has a bug, maybe it's worth listening to the patch notes.