> The only plan that can works is if you accrue a large enough amount, from which the interest earnings are enough to sustain you indefinitely (using a low interest but safe returns instrument like high grade bonds and gov't bonds, with a small mix of stocks selected for dividends).

I don't plan to stay alive indefinitely, though, so I don't need a plan that will sustain me indefinitely. That is overkill, and most people can't afford to save that up.

What I, and most people need is a plan that will sustain the retiree until they die - and not just for an average case scenario.

Pension plans have lower expected returns, but handle the long-tail cases well, because they balance risk between different participants - some of whom die early, and some of whom die late. Someone who dies five years after retirement will draw much less from a pension than someone who dies twenty five years after retirement. The existence of the former provides safety for the existence of the latter.

401Ks have higher expected returns, but handle long-tail cases poorly, because there is no diversification of risk for the individuals participating in them. I may end up dying with 90% of my 401K in the bank. That does me no good. I may end up saving up to live into my 80s... Only to discover - too late - that it wasn't enough.