If you save your money in a regular bank account, such as a CD... the bank will invest that money as they see fit, earn anywhere between 3-25% return on it, and pay you less than 1 percent return. They keep all the interest for themselves. A high level of credit card debt, and using banks for savings accounts is exactly what has led to the poverty gap. The bankers get rich while the little guy actually loses the value of their savings, since their interest earnings are less than inflation. If more people invested in mutual funds, either directly or through a 401k, the gap would start to close. There's no reason the little man can't help lift up the great companies of the world and himself in the process of investing. Saving through investing used to work out well, as mentioned through pension funds, until banks figured out ways to trick people into low-interest investing.
I highly recommend you invest your 401k in mutual funds, as they have very smart individuals moving the money around for you, where they believe it will grow best. I like American Funds the best, as it's had the best growth over time, Fidelity is a good one too. There are others, take a look at their numbers and how they decide what to invest in. Like I said, I like American Funds because they have a 10 year mentorship program for their researchers and investors. Basically, they never have guys fresh out of college deciding how to invest your dollars. Remember that the value of your account will go up and down over time, but overall the average is always growth. As long as you hang in there and don't liquidate accounts while the market is down, you'll be fine.
If you have more questions about it let me know, I've been going to school to be a financial advisor, I'll be done with my licensing in about a month. I'm by no means an expert but I know a thing or two.