401(k) is, and was, not meant to supplement traditional pension plans (so you can have that extra European vacation). It was meant to replace those unrealistic and unaffordable lifetime pension programs where people can retire after 20 years, and have lifelong payouts with COLA and health care benefits. Those programs had bankrupted private companies like the ones in the auto industries. Most of the remaining pension plans nowadays that still have generous terms and payouts are the public sector pensions, but they are operating under the illusion that there are unending well of public money to fund them.
Exactly there seems be some perception both among some academic and some retirement writers, especially this NYT reporter Jeff, that there was some golden age of retirement where everybody had these pension.
There were always comparatively few blue collar workers (and almost entirely union) who could retire without saving money and still enjoy little no or reduction in their living standards once they retire. Among white collar workers really this was mostly public employee and a slim majority of Fortune 500 companies.
For everybody else the only way to retire and not see a big cut in your standard of living, was to do what most of the board members do. Save at least 10-15% of your salary, pay off your mortgage. Then because of lower taxes, no FICA, no mortgage payment, seeing your gross income cut in 1/2 or even a bit more in retirement is ok. Your expenses are much lower and social security takes up much of the slack.
Of course the majority of people never saved a lot and when they retired the learned to make do. It is difficult to find consistent number of how much retired people spend or earn. But if we look at the figure from the Social Security Admin and other sources.
The median SS check is $13,525 a year and social security is ~70% for the median family. This means total earnings are $19,300. Now this is challenging to live on in many places in the country (certainly NYC)
On the other hand the picture is better for couples
Average SS benefit for couples $24,576 implies an income of $35,100. If they started with a nest egg of $100,000 they spend an additional $3,000 a year this means they can spend $38K a year An amount which is more than many ER members are planning or do spend in retirement. Now it is true as the dip into the principal their earning decrease as the age...
The 401K provide a big incentive for people to save more and this is a good thing, and actually a big improvement from the good old days, when the vast majority had no retirement program.