This MSN Money article discussed Brooks Hamilton's conclusion why 401(k) failed to work for most people. Brooks summarized three mistakes (or "Big Monkeys" as he called them):
1. 30%-40% do not join the plan in the first place.
2. For those who do join, 30% of them will contribute too little.
3. For those who do join and do contribute enough, 90% will fail to achieve near-market results that lead to enough retirement income.
Brooks concluded that by the end of the day, there are only 5% who can retire comfortably out of the 401(k) system.
I totally agree that people will need more 401(k) education and will argue they should save even more after they max out 401(k) contribution. After all, there is a cost of not saving for retirement.