An incentive that works less well than I thought

A recent study indicating that tax incentives for retirement savings are not very effective is changing my thinking about that incentive, specifically about how it's worked in my life.

My wife and I are savers. Arguably, we've had to be, as our income was pretty low until our late thirties, and neither of us is building a fixed pension.  Plus, we've had maybe 40-60% of our money in stock funds since we started saving in the late nineties, and what with two market crashes I reckon our return has been less than 5% per year.

Since the late '90s I've had the kind of solo retirement accounts allowed to the self-employed. Early on, I was allowed to save 20% of my income, and I was comfortable with that, and my wife has done the same through her employer.  Since the individual 401k was created in 2004 or 2005, however, I've been allowed to tack on an ever-increasing contribution on top of the 20% -- this year, an extra $22.5k, since I'm over 50.  That is a tall order.  I am always acutely conscious that a large chunk of every allowable dollar that I fail to contribute goes to taxes -- avoidably. So I come as close to maxing out as I can.  I've always assumed that this a good thing -- that this incentive is working as it should.