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....So I'm despairing about how I'll ever be able to retire......

The rule of 72 is that you can divide the expected return on your investment by 72 and get the approximate time it will take your investments to double. For example if you expect to earn 7.2% then 72/7.2=10 years for an investment to double. Over the long term earning 7.2 percent above inflation is a pretty reasonable and convenient figure to use.

Using the rule of 72 and assuming a 7.2% return means if you have $15K in the Roth today, then at theses ages it will double and be;

38 $30K
48 $60K
58 $120K
68 $240K

People have done a lot of analysis trying to figure out what a "safe withdrawal rate" (SWR) in retirement is. Without going into details a pretty good argument can be made that you can start out withdrawing 4% of your nest egg each year if your retire around the normal age. If your retire with $240K, then you could withdraw a bit less than $10K each year. In addition to social security this would be getting in the ballpark of replacing your current take home pay Surprise !!!! Of course over the years you will likely get raises and promotions and you will need a larger nest egg to replace your future higher income.

In addition if you make another $5,000 Roth contribution next year, then you will be able to retirement a year or two earlier.

.... but I just did a little calculation that was disappointing....

As odd as it sounds, having a number of low return years while you are building your investments is the best thing that can happen for you because you get more stock for your money.

Greg
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