401k's and IRA's do encourage savings. Most people participate by having either an IRA/401k or some variation. That has worked.
What's the median 401k balance? The median IRA balance? The very fact that these are low is telling you that people are not using them to save enough.
Some savings is better than none. The vast majority of people do participate in a 401k or IRA, they simply don't save as much as they should. I would say some saving is better than none. The vast majority of the population won't save the money if it's not tied up in a difficult to get to account.
Some people choose not to save enough (not my problem).
Some Most people choose not to save enough (not my problem).
Yes, it is not a problem for you. Indeed, it is your prerogative to not care about the rest of the people in our country but I do.
I didn't say or infer not caring about others. I did say if you choose not to save enough for a great retirement than that's on you. Actions have consequences.
We have social security, it provides an average benefit of $1200 to $1300 per month.
http://www.ssa.gov/news/press/basicfact.htmlThat's not a great retirement, but given the rockstar lifestyle being advocated on this website for $25-30k a year, seems like a pretty good start.
If the average senior is getting 16k per year in benefits, they only need to have saved $225k (4% w/d rate), for each person to have $25k a year tax free. My parents, who live primarily on ss, live pretty awesomely on $40k.
In short, we have a retirement system for those that don't save. It's called social security.
With regard to the other comment regarding confiscation, that will happens through means testing. I don't agree with means testing because it punishes successful savers and will discourage savings long term.