Same thing with people’s retirement accounts. If everyone’s savings were just in the bank getting 1% interest no one except the wealthy would care if the stock market eats shit. Instead we can’t stop the insanity of individuals with 100s of billions of dollars due to the entire worlds retirement savings fueling insane market prices.
Independent retirement would be impossible with 1% returns. With the market's historic rate of return (around 6% after inflation), an investment doubles every ~12 years. A dollar saved at 30 years old is worth ~8 dollars by 65. In a scenario where 1% returns were the norm, a dollar invested at 30 would only be worth $1.40 at 65!
Also, since you wouldn't get much income from investments while retired, you'd have to save way more in that scenario to be able to retire. Sounds like a miserable alternative.
