Known: How to Create a Great 401(k)

Throughout my career, I crisscrossed the country from Peoria to Pittsburgh, Dallas to Columbus, New York City to Minneapolis/St. Paul, listening to employers talk about their 401(k) plan and how it serves their employees. I always asked about their employee engagement strategies, their benefits structure, and workforce management—and if they strategically connected their 401(k) to these important topics.

I also had the honor of hosting many working sessions by leading academic, David Laibson, professor of Economics and Chair of the Economics Department at Harvard. David’s extensive work on the 401(k), in collaboration with a diverse roster of researchers, uncovered brilliantly practical and solidly logical opportunities for plan improvements that I totally took to heart. I spent years sharing these ideas and helping key people at large companies through the long and involved process of deciding to implement them.

This combined with my own place and time: I started saving in my 401(k) when I was 22 and have been broadly diversified from the start—when I made my first contribution in 1994, I became of the first investors in a Target Date Fund. I watched my balance grow over time and didn’t stress about my sizable nest egg during the financial crisis, because I had confidence in my strategy for long term investing.

After 20+ years in and around the 401(k) I came to a startling conclusion:

  • Everything we need to know to create a great 401(k) is already known.
  • Companies have a hard time upgrading their 401(k) because of organizational behavior.
  • Creating a great 401(k) is a clear win-win for participants and employers.

Over the years, many plan sponsors told me that I think about the 401(k) differently than others. (At the end of our first conversation, one client said to me “this is exactly what we needed to know. Where have you been all my life?”) I realized my perspective might be helpful to ambitious and thoughtful people looking to bring positive change to employees’ financial wellness in the most efficient way.

So, I wrote a book. It’s a practitioners’ guide called Known: How to Create a Great 401(k). It’s not particularly technical: it’s simply how to get improvements done in the real world. It’s now available on Amazon.