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Further IRA and 401k contributions can go up or down. It is foolish to count them as savings because they are not 'money in the bank'. The day before Enron revealed its behavior all it's employees were certain they had great 'savings' for retirement. That saving the next day was worthless. Promoting that rationale and basing government policy on volatile 'savings' is stupid

Then do you mean that, if I put after tax money into a savings account, let it build up, and withdraw it to buy stock, that money ceases to be "savings?" Even the government calculations don't go that far. The only differences between 401(k) equity investments and after tax equity investments are that taxes are deferred on 401(k) investments and are not on after tas equity investments, taxation is somewhat different, and there are a number of restrictions on withdrawls from 401(k) accounts. You're arguing a distinction without a difference.