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I honestly thought about this, back then when stock market had 'predictable returns.' Imagine $100K ($25k X4) in a retirement account for 40 years.

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At 6% APR after 40 years it would be over $1 MM.

Discount that $1M with 40 years of inflation to give some idea of what the purchasing power might be and it doesn't look quite so impressive.

Let's use historical data instead of back of the envelope guesswork.

Over the last 40 years (1970-2010) the average S&P 500 return has been 11.61%, while inflation has been 4.4%. Past performance not necessarily but usually predicting future performance, but, with those rates...

Over the next 40 years $100k would grow to $8.1 MM in future bucks, or $1.45 MM in 2011 dollars.

http://www.moneychimp.com/features/market_cagr.htm for returns, http://www.moneychimp.com/articles/econ/inflation_calculator... for inflation, and http://apps.finra.org/Calcs/1/Savings for savings calculations.

Somehow I don't expect the next 40 years to look a lot like the last 40 years.

You might be dead before you get to spend it.

It has a lot to do with the peace of mind as well: "OK, I have to work till 60, but then I'm going to be pretty comfortable"

Inflation obviously takes a bite but it takes the same bite even if you put $5k a year when you're 40.

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