If you manage to go your whole working life with no emergencies and disasters, then sure! Median income today is >$50k. If you save 20% a year in a retirement account, earn a historical market average 8% a year, and manage to never touch it, and started working 45 years ago (making 3% less each prior year, to account for lower wages) you’d theoretically have about $1.5M today.
The problem, of course, is that all of the assumptions have very high variance, most of the ways things can be different for individuals make the outcomes worse, and it’s unconscionable to make everyone to tie their futures to forces beyond their control when we obviously have the societal means to do better.
Back when we were privately owned, we had a hard time maintaining the minimum participation rate for our 401k because most of the nurses could not afford to have 5% withheld, even though we matched 3% dollar for dollar and the next 2% $0.50 per dollar. I mean, free money was not enough motivation, since it was not available right then. If you are paycheck to paycheck, retirement savings are a pipedream.
I will say that I know an older couple, college professors, past retirement, who were the only people in either of their departments who kept their pensions in the 90s when everyone else shifted to 401ks… guess who came out best from that arrangement.
If pensions are protected from corporate raiders, they work well for retirement funds, and there is no reason why we could not have a national pension system in the US, except for the corporate opposition to it.
I am forever grateful to the coworker who made that point about 401(k) matching being free money, and the employee stock purchase program also being pretty much guaranteed minimum 15% profit (actually more like 17% if not much greater) if you flip it immediately.
It wasn’t until just this year that I figured out the 3% match meant matching 1:1 the first 3%, and not just paying 3% of whatever I contributed: 0.03:1.
