The longer and more money you have in a savings account, the less purchase power you actually have. Think of this like putting $100 into the account but only being able to spend $90 of it. Multiply that by your life's savings... and this becomes a horrible way to save for retirement.
A Money Market account would be better, and nearly as safe as a savings account.
IRA's and 401(k) where you control you money is ideal. If you don't want to be bothered to pay attention to the markets... get yourself a managed IRA (yes, a fund would then be in control of your future). With a managed portfolio, you generally get some say over how your money is invested - so you could direct them to invest in industrializing economies (which would help lift people out of poverty over time). Just because you make money on the stock market doesn't mean someone is getting screwed over...
Bottom line is, a savings account will lose you money over time (and that doesn't even touch on the maximum amount you can have per account to be insured, which is far less than you'll need for retirement).
I agree that this is not feasible now but that is only becaus of the low interest. That dynamic would change if the interest is dialed up.
We've just re-invented the stock market.
We don’t need the stock market.
With interest rates as low as they are, savings accounts have a negative real return. The $1000 you save today would have substantially less purchasing power by the time you'd retire.
> As a bonus—while you are not using that money—other members of your credit union can use this savings in a form of a loan, to buy a home, start a business, etc.
Well, yes and no. Banks don't really directly lend out the money deposited in savings accounts, due to fractional reserve requirements.
> The idea of my retirement being at the will of some hedgefund manager is not appealing next to the idea of my retirement being used temporary to help my neighbors buying a house or start a business.
I don't get this. With an IRA or a personal taxed brokerage account, you aren't at the mercy of anyone: you can choose which companies & funds to invest in. Hedge funds are not the be-all-and-end-all of the stock market, most funds are mutual funds who invest conservatively. If you just mean that hedge funds can cause black swan events like what we're seeing with GME, then sure, that's a concern, but only for the short term. Long-term, the stock market tends to appreciate and substantially beat inflation. We can add regulations to prevent hedge funds from fucking things up, without tearing the entire system down.