What do you think will happen, from a macro perspective, when all these folks who have not saved/minimally saved reach (traditional) retirement age?
Of course no one knows until it happens, but it might be interesting to do a thought experiment... or just speculate! :)
From a micro-level, obviously some people will just postpone retirement, and keep working as long as they can; some will probably just unhappily accept a lower standard of living supplied by social security; some will probably look to friends and family to help out; some will probably forced into retirement/fired/laid off, and have to work lower-paying jobs...
But what the broader effects of this will be, I dunno. The cynic in me is afraid that all these people will expect their government to bail them out. If they're not working, and presumably no longer raising kids, they'll have a lot of time on their hands. I suspect the voter turnout in such a demographic is quite high. They could vote into power officials who will be happy to tax prudent savers (wealth tax anyone?) to pay for the non-savers.
I sometimes think about labor in terms of supply and demand, and wonder, what if the supply of labor greatly outpaces the demand for it? And I don't mean in typical business cycle fashion, but in an absolute sense: what happens when we can provide most of human necessities (and even luxuries) with minimal labor (robots, 3D printers, etc)? Furthermore, if people have traditionally been leaving the workforce at around age 65, and now those people may be staying for another decade or two, then the supply of labor will go up... at the same time the demand is lowered due to technological innovation. But we can't all be innovators---a lot of people simply aren't wired that way.
One of the things that makes me think about this is that, just from casual observation, so much of our economy seems to be driven by convenience and luxury... I think a loose paraphrasing of the MMM/ERE philosophy is that you can live on very little expense (and therefore retire quite early) if you deliberately choose a middle-class life from a generation or two prior. I tend to think about 50s-era suburban USA: sure we have more luxury and convenience today than we did 60 years ago, but are we really happier? And more importantly, a middle (or possibly upper-middle) class standard of living from two generations ago, is (1) still a great
standard of living relative to the rest of the world and humankind's total history, and (2) can be effectively achieved at a today's poverty-level income. And if this trend continues, then it seems reasonable that in another generation, you could live quite comfortably (by worldwide and/or 1950s standards) at below
poverty income. And perhaps in two more generations, you can life that life virtually free.
If you can achieve a reasonable (yet basic) standard of living for virtually nothing, it means there is little or no profit for the people/institutions supplying your needs. And where there is little profit, there is minimal demand for labor.
I made a similar comment to this one on another blog, to which some replied with a reference to Marshall Brain's Manna
mini-novel. It's a quick read and an interesting story, and certainly coincides with some of the ideas I threw out above.