Think about it. The average person looks at a million dollars and thinks, "No way, that's only for those rich folks, top 1%, Black Gold, Texas Tea…"

This is especially true the younger they are. Those seven figures tower over the mere pennies (or even thousands of dollars) they're used to seeing in everyday life. Nope. This million-dollar thingee is just not in their league.

On the other hand, most people are aware enough to realize earning 3% a year over the long-term is a piece of cake if you invest in stocks. Indeed, since Ibbotson decided 1926 was the year to start collecting annual stock return data, of all the 20-year periods since then, 98.55% yielded returns meeting or exceeding 3% a year. That's a pretty good batting average. So, most people, if told they needed to average 3% a year for 30 or more years, would feel pretty good about their prospects.

But, a million dollars? Pshaw!

Now, let's look at the average engineer coming out of the average engineering school. He'll make about $60,000 a year to start. He can look forward to working 49 years until he retires. Since this is his first job, he doesn't have anything saved for retirement, so he's starting from scratch. His company will match up to 5% of his salary (that's $3,000 a year). He feels frugal, so he saves 9% of his salary (or $5,400 a year) into his retirement plan. In total, he's got $8,400 in contributions every year.

Based on all this data – his current salary, his annual contributions, and his retirement age of 70, we can calculate he needs to accumulate about a million dollars to retire comfortable. Remember, he has zero. He's only putting in (out of pocket) less than $500 a month.

That's penny-ante money compared to one million smackeroos. This is exactly where the typical person enters my domain. They're faced with this seemingly insurmountable goal, they don't know anyone who's ever accomplished it, and they simply can't afford to contribute anymore. Worse, every day some media outlet is screaming how Americans don't save enough for retirement and face the prospects of working forever. The typical person gets depressed if he thinks he'll have to work forever. 

So, I go through all his assumptions and confirmed they're all correct. Then I happily state they're in the perfect position. They don't need to do anything more and they can retire on schedule. 

This usually elicits a double-take, followed by disbelief, followed by intense curiosity. I explain they should think about the large number at the end of the rainbow, they should think about the small number each step of that rainbow has.

In the case I just outlined (a case, by the way, that assumes no Social Security), the employee will only need to earn 3% a year from now until retirement. I look at the employee, smile, and ask assuredly, "That doable, right?"

The employee smiles, nods, and leaves the room with an ever-so slight skip in his step.