Wrong! If my retirement is in a 401(k) or IRA, the IRS takes 15, 25, maybe 35% when I withdraw it. And since we seem to be arguing about which base to use, if they take 35% of my total account balance, they have taken 54% of what I have left. If my retirement nest egg is in stock, the IRS takes capital gains of maybe 15%. (or 18% of what I have left) If my retirement fund is in cash in a passbook account, you may have a point. Then we would have to rely on some price reduction due to elimination of the embedded tax in the price of a product to come out even.
I have heard a lot about problems to be dealt with with the FairTax, and I agree there are some. I have not heard of one dis-qualifier.
If it's in a Roth IRA or personal savings it isn't. Your straw man failed.