(Before I go on my crazy thoughts, I do contribute 5% as that is what my company matches)
Given: Traditional retirement accounts such as 401k and IRA are based on a tax deferred system (govt does not tax you now but will when you take that money out). People contribute because: you can save money pre-tax, and, some people's cases, put themselves in a lower tax bracket. The assumption is that when you retire, you'll be in a lower tax bracket. Here's where my hesitancy begins:
Our government is spending/increasing budget/bigger debts/loose fiscal & monetary policies at an unimaginable rate. What are the consequences?
For one, the destruction of the USD. All this bullshit quantitative easing...QE1, QE2, QE99...they are manipulating debt markets, and injecting the market with tons of cash. This punishes savers. There will be a vicious inflation backlash when they decide to unwind all the QEs. Multiply this by 20, 30 years, and by the time we retire, our retirement 401k and IRA accounts will have struggled to keep up with all this inflation we will experience.
Two - all this govt spending will eventually require the govt to increase taxes over time. Just look at the history of the increasing tax rates over one generation's worth of time. You want to be like Europe and have universal health care? Prepare to pay taxes, European style. The assumption that you'll be in a 'lower' tax bracket when you start accessing your retirement account is a huge assumption.
This is just food for thought, and part of the reason why I won't contribute more than what my company matches. I am not a crazy person who thinks all govt is evil...we did need the help in 2008/2009, but continued quantitative easing is poisonous to our future. That in itself is tied to our political system. Whatever party/person in office will do what's best for him/her/them to get re-elected/stay in office, even if it means borrowing against the future, because hey, not their problem once they're out of office. This continued manipulation of debt markets is exactly what Greenspan did to create the original asset bubble that burst in the latter 2000s. Not only that, but they're just delaying the inevitable. It's like spilling milk, and making a huge mess, but instead of cleaning it properly, you throw a rug over it. Eventually it'll have to be dealt with, but when you do, it'll be exponentially worse.