You’re absolutely right, but I’ll just point out that superannuation (pension) funds in Australia are hitting 8 percent annual returns over a 30 year timeframe. You need a broader investment base to do that, and that’s hard for individuals to do by themselves. How do you diversify your $50 a week investment to maximise return? You can’t.
Here, superannuation funds do all the heavy lifting for you, it’s mandatory for employers to put a nominal amount of each pay into one. There are no minimum investment amounts with them and fees are waived if the balance is below a few thousand, so even if it’s $10 a week you get something back eventually.
So it’s possible to have it work if your government sets things up right.