Have you ever sat down with your calculator or spreadsheet, plugged in what you're saving for retirement, factored in an average compound interest rate, and then looked at that lovely, large figure you should have when you retire?

That little exercise was a lot more fun before the market tanked.

These days, with stocks -- and our portfolios -- so far off their peaks, such rosy projections are tougher to make, much less believe. Thanks to the steep drops we've endured over the past year, it'll likely take us years just to catch up to what we thought we had -- much less make forward progress.

Was all that saving and investing really worth it?

Saving, especially for retirement, is always worth it -- no matter what the market does.

First and foremost, the act of saving enforces good discipline that helps make sure you don't outspend your income. It means you aren't accumulating debt that will undermine your financial health, and it means you have some capital to fall back on, should you lose your job or experience some other financial catastrophe. In an economy like this one, in which job losses keep escalating, that matters.

Even without reaching for astronomical returns, you can wind up with a considerable nest egg, just from saving. This table shows just how much a consistent saver can walk away with, without taking on much risk at all:

Annual Savings

Total Saved Over a 45 Year Career

Compounded at 3% Annually

Savings Implication




IRA contribution Limit (under age 50)




401(k) contribution limit (under age 50)




Max out Both IRA & 401(k)




2 income couple, each maxing out 401(k) and IRA

That 3% isn't outlandish, either. 30-year U.S. Treasury Bonds, which have the same government backing as FDIC-insured deposits, recently yielded 3.7%.

In other words, you and your spouse can potentially wind up multimillionaires, simply by maxing out your retirement savings over the long haul.

What about the rest of us?
Most of us, however, can't afford to save $43,000 a year -- certainly not in the first years of our careers and families.

That means upping the ante on those savings and investing at least part of it in the stock market. In spite of the 2008 freefall, stocks have historically returned, on average, around 10% a year. Over the course of multiple decades -- the time frame that matters most to retirement investing -- that adds up.

Buy stocks? Now?
Even after this meltdown, after all, the stocks of some well-known companies still have decent long-run track records. Take a look at these, for instance:


If You Invested $1000 30 Years Ago, You'd Have...

Disney (NYSE:DIS)


General Electric (NYSE:GE)


Coca-Cola (NYSE:KO)


Lockheed Martin (NYSE:LMT)


McDonald's (NYSE:MCD)


ExxonMobil (NYSE:XOM)


Kroger (NYSE:KR)


Data from Yahoo! Finance, as of Feb. 3, 2009; includes splits and dividend reinvestment.

Our recent economic meltdown is concerning, for sure, but it doesn't negate the truth of that long-term power of compounding. Don't forget that the most recent 30-year period captured all of these things:

  • The tail end of the 1970s stagflation
  • "Black Monday" in 1987
  • The dot-com bust in 2000
  • The aftermath of Sept. 11, 2001
  • The Panic of 2008

Could I have found companies that weren't as successful? Sure. But that doesn't change the rewards of being a disciplined investor with a long-term focus, even in a market crisis like this one.

Yes, I said "discipline"
Investing in the stock market with the expectation of higher long-term returns requires discipline -- especially the discipline to define an investing strategy and stick to it, no matter what the market does. That means saving and investing regularly, investing in solid companies even when they're temporarily affected by an economic slowdown, and keeping a close and critical eye on your investments, even when your portfolio manages to grow faster than you expect.

Over time, after all, the market rewards successful, well-managed companies and their shareholders, even if any given year might be extraordinarily painful. If you have the patience to consistently save and invest in successful and well-managed companies, you can still wind up with a comfortable retirement.

And that means that discipline -- the act of following through with your long-term saving and investing strategies -- is the real difference between poverty and prosperity.

Save somewhere
Wherever you put it, it's important to set aside cash for your retirement. Without it, you'll have to subsist on little more than whatever meager scraps Social Security can send your way. But if you're willing to save consistently over time, the mere act of putting money away goes a long way toward ensuring your comfortable retirement.

At Motley Fool Rule Your Retirement, we know that the savings your discipline creates can be the basis of a strong and comfortable retirement. We'll show you how, with model portfolios, recommended assets, and extensive retirement education. If you'd like to find out more, just click here for a free 30-day trial -- there's no obligation to subscribe.

At the time of publication, Fool contributor Chuck Saletta owned shares of General Electric, and his wife owned shares of Kroger. Coca-Cola and Disney are Motley Fool Inside Value picks. Disney is also a Stock Advisor recommendation. The Fool has a disclosure policy.