Is the nest egg you know you'll need when you retire such a big figure that it's intimidating? For some people, the difference between what they've got now and what they'll need later is so big that ... well, they don't even bother trying to save it.

Don't let that be you. Building a six-figure stash isn't nearly as out of reach as you might fear it is. The key is using all the time you've got between now and your retirement to grow the money you have to start.

Some surprisingly simple math makes the point.

Investment fortunes can start out small

A handful of assumptions are in order to illustrate the amazing cumulative power of time. First, for the purposes of our number-crunching, we'll assume you're investing in the S&P 500 (^GSPC -0.16%), which dishes out average returns of about 10% per year.

Second, let's assume you've got 30 years to grow an in-hand stash of $20,000. Your actual numbers may be different, but that doesn't change the big-picture illustration of how small amounts can grown into big amounts over time.

Third, let's assume this money is being held in a tax-deferred account like an IRA.

Based on those assumptions, a $20,000 investment made right now in an index fund built to reflect the S&P 500's performance swells to nearly $350,000 30 years down the road. This graphic illustrates the growth of this relatively small investment over time when your gains are reinvested back into the market.

Most compounded investment gains are achieved in just the last few years of a saving period.

Data source: Chart by author.

The big gains come from compounding, or growth fueled by your reinvested gains rather than your initial principal of $20,000. During the last five years of the 30-year stretch in question, the gains on your past investment earnings each year end up being larger than your original $20,000 of seed money.

Indeed, with this model, you earn half of your total net profits in just the last five years of the 30-year span. About two-thirds of your total gain is achieved in just the last one-third of the 30-year time frame.

Said differently, you have to muddle through years of seemingly so-so gains to really start seeing meaningful numbers. The biggest gains come near the tail end of the process when you start earning money on all of your (then-sizable) cumulative returns thus far.

But what if you don't have $20,000 to start right now, or maybe you don't have 30 years to wait? That's OK. You can still do a lot with a little. You just have to do something, and you have to do it now.

As another example of the power of compounding, let's suppose you don't have any lump sum to commit to the stock market right now, but you're confident you can come up with an extra $3,000 per year for the next 25 years. Once again, assuming you're achieving relatively typical annual returns of 10% on an S&P 500-based index fund, you should still be able to end that 25-year stretch with a nest egg of right around $325,000. Not bad.

Again, notice how the bulk of your total gains take shape in the final years of your saving period, even though you continually put new money into the account the whole time.

Regular annual investments in the stock market can grow into a surprisingly big nest egg in time.

Data source: Chart by author.

Most likely, your situation is somewhere in between these two scenarios. That is, you've probably got a bit of money you can commit to the market for the long haul, but you can also put more to work in the future as you earn it. That's great! Even if you can only scrape together a few thousand bucks each year for 20 to 30 years, there's no reason you can't build up at least a small six-figure nest egg.

Of course, if you can come up with more excess cash between now and your retirement, all the better. The most important piece of the puzzle is just doing something -- anything -- to get started.

Take the first step

Yes, getting started is hard, even if only for psychological reasons. It's also almost as tough to stay in the market when it's not doing well. While these examples assumed an average annual gain of 10%, the market's never that consistent. Some years it's up by 20% or more, and sometimes it falls more than 20%. Those big down years can certainly shatter your confidence.

Don't let it, though. The market always recovers eventually, but you have to give it time.

To this end, as your retirement nears you'll certainly want to rethink how much net exposure you have to stocks, since the market could be on the decline when you're ready to leave your job. Also bear in mind you'll be paying taxes on your gains sooner or later, and inflation reduces the value of a dollar (a $350,000 portfolio today won't mean as much 30 years from now).

All the planning, worry, and effort is still worth it in the end, though. So, just get started, even if that start seems small.