I don't get it. Even as stupid as I was in my 20's when it came to money, I was still smart enough to contribute 3% of my pay to get the full 3% of matching funds from the company (plus a 8% annual discretionary lump sum I've gotten 15 out of 16 years of employment, which I admit isn't usual). Overtime I've increased that to 10%. If I don't change anything and my employer doesn't change anything, I'll retire w/between $1.3M and $2.2M, depending on ROR and when I pull the plug (ranging from 59.5 and 67, assuming standard American retirement ages). Not bad for essentially half-assing it all these years.
Using a basic compounding calculator, putting $3k per year away in savings (which is 3% of a $50k annual salary w/3% company match, or 6% of same salary w/no match) gets you to just over $900k if you start at age 22 and retire at the standard 67, assuming a 7% annual return.
$3k per year. To earn ~$36,000 annually (4% withdrawal rate) in addition to SS. Just start when you're 22 and stop at 67. Just about anyone should be able to cough up $250 a month (or $125 if you have an employer match).
Hell, lets say you have your head up your butt and don't start saving until 35. You kick in 10% of your $50k salary and employer matches 3%. You still retire at 67 with $766k.
Unless you just flat-out refuse to save ANYTHING in your 20's, 30's, or even 40's, I just don't see retiring without some sort of nest egg. No, your retirement won't be "Lifestyles of the Rich and Famous" but no reason to be put out on an ice flow, either.
WTF are these people doing? I get not thinking about retirement in your 20's and even into your 30's, it's hard to look 40+ years down the road (even though I did it, it was still pretty abstract for me at age 23 when I started my 401k). But by mid-to-late 30's, if NOTHING else, you should see your parents starting there own retirement journeys and it should occur to you to maybe start figuring it out. I have no understanding (or sympathy) for those in the their 40's (or god help us) 50's waking up one day and freaking out that they have no retirement savings.
I suspect a whole bunch of different factors, in combo or singly. First off, inborn personality. Some people are inherently better at controlling impulse, others are live-for-the-moment types. This can only be modified to a minimal degree (which is why the famous marshmallow test of toddlers is excellent at predicting certain markers of success for those toddlers 25 years later). Some people are cautious by nature, and tend to think more of the future consequences of actions, but most people are less so. Humans are not terribly good at long term planning of any sort, in general.
Second, environment and modeling behavior provided by parents or other role models is important. I had good modeling from elements of my family (who were frugal and saved in retirement accounts and owned their own businesses, though they never specifically discussed these elements of life with me or told me what I should be doing). My husband grew up with people who barely were always scraping by and never saved. They couldn't even conceive of how to save enough to retire on because no one they knew had savings. They weren't educated, and probably had no idea how to invest, how IRAs and 401Ks worked, or how to access them. They worked until they were no longer physically capable, and then lived briefly even poorer, and usually died quickly. When I first met my husband, he hated when I talked about planning for retirement. It was an inconceivable concept to him: Retirement and Death were synonymous in his mind.
Third, many people work in jobs with no retirement plans (perhaps about half? can't remember precise stats). Or they change jobs frequently and don't ever build enough of a 401k to feel that rolling it over is worth it, so they cash in when they change jobs. Often they have no consistent work culture where retirement options are discussed or reinforced. So, no regular peer pressure to get going on it.
Fourth, life cycle 'order': As you noted, when you were young it didn't seem real to you. But at least you were working a job that had the option, and you realized you should take it. My husband, after doing wage slave jobs and stints in the military, didn't even start his first professional non military job with benefits until he was in his late 30s (after going back to school). At that point, he just wanted a stable paycheck and to live in a decent house and pay off bills. At least he grasped the value of 401k by then, but for a lot of people (myself included) I think retirement feels like the thing you do AFTER you get the rest of your 'adult' life rolling. When I was in my late 20s and finally getting out of grad school, it was the first time it occurred to me to seriously consider retirement savings. But the first few years out, I was more concerned with paying off debt, getting a reliable car, buying a house, and hell...even buying a BED. Thankfully, I did recognize that employer matches were free money. But I can see how people sort of fall into, "first the house and student loan payoff; oh, now we need to have the kids; save for the kids' college; and then at 45...OH CRAP we need to save for ourselves!" Big challenges like stupid debt, divorces, medical bills, etc. also crop up in many peoples' lives and contribute to this problem.
Fifth, inertia, and lack of knowledge: Some people react to uncertainty or anxiety by freezing up. Retirement planning seems like a complex thing, they are ignorant of it, so much is riding on it...they panic. Then they say, "I'll sign up for the 401k once I have a chance to read the paperwork/I'll sign up once I've paid this car off and can spare the money/What if I make the wrong fund selection...I need to consult with someone who know, but who should I trust?' etc. It's not logical, but research shows that the more options people have, the harder decision making is...and the retirement options can sometimes be large and scary unless you seek out guidance. I have family and friends who have frozen up in terror at having to tackle it, and others who just hate/are bored by even thinking about it. Either way, they put it off and tell themselves they'll do it later.
Sixth, 'too late now' syndrome: You're correct that, at a certain point, the need to save DOES sink in for most people. But if they have nothing, and they are past 40, it can seem like an impossible catch-up task, which makes many personality types avoid and ignore even more. That's where you get the "I'll just work till I die" and other unrealistic 'plans'.
Finally, sheer ignorance and lack of resources. Lots and lots of people are just not that intelligent and might find some of these concepts tough to grasp. Or, they might see their grandparents (who might have other sources of income than SS, such as pension) living ok and think, "it will work out somehow". Essentially, over optimistic magical thinking, which humans are very prone to. Or they just make so little money (remember that median household income is around 50K, which means half of the households make less. In those cases, the drops in the bucket they feel they can carve out probably seem too small to ever add up.
There's probably other contributing issues. It's not so much that I have sympathy for exactly, it's just that I think it's pretty easy when you combine a bunch of these to see why a lot of people get going quite late, and make a lot of less than optimal decisions. I've seen some combo of a LOT of these things among friends and family, all of whom are college-educated, so they don't even make up a representative sample of the average American.