Not yet convinced that failure is baked into the voluntary, self-directed, commercially run retirement plans system? Consider what would have to happen for it to work for you. First, figure out when you and your spouse will be laid off or be too sick to work. Second, figure out when you will die. Third, understand that you need to save 7 percent of every dollar you earn. (Didn’t start doing that when you were 25 and you are 55 now? Just save 30 percent of every dollar.) Fourth, earn at least 3 percent above inflation on your investments, every year. (Easy. Just find the best funds for the lowest price and have them optimally allocated.) Fifth, do not withdraw any funds when you lose your job, have a health problem, get divorced, buy a house or send a kid to college. Sixth, time your retirement account withdrawals so the last cent is spent the day you die.
As we all know, these abilities are not common for our species.
— from "Our Ridiculous Approach to Retirement" by Teresa Ghilarducci. There's also a special section on retirement.
I've mentioned my parents weren't the world's best money managers, my father in particular. I was vastly relieved to find that his pension, like his social security, had no lump-sum option and could not spent at once ... which is part of why he still HAD it, despite his drinking, spending sprees and eventual dementia. If my folks had had to save for themselves they would've been left with just social security.
I'm light-years ahead of my folks, but there's still plenty that could derail retirement savings. I have friends who've had to cash out their 401(k) due to unemployment or illness. And yes, not everyone lives long enough to retire. But it'd be nice to have the option.