David-

The reason it is sooooo amazing when you increase that interest rate over time, is called compounding. Going from 2% to 6% the first year is threefold. The next year it is higher than threefold. By year 50, its ridiculous. Your example of a mutual fund providing 14% return a year on average factors to be a heck of alot more than 7 fold return.

Your point is a good one. You can actually have a system with far less money going into it (sound familiar as the baby boomers start retiring) but end with greater funds in the end.

BTW (backlash)- when you put money in an IRA or 401k, do you envision it going into a big vault and just sitting there? Any idea what banks do with it? Please don't take this the wrong way but one of the healthiest things for the economy you can do is put money into vehicles like this. That money is lent out to businesses for expansion, r & d, etc. and immediately goes back into the economy in the form of purchases of goods and services. When you give that money to Gore instead for your retirement fund, the majority of it sits and does nothing. That is the reason they achieve a rate of return below that of inflation. If you take inflation into account, we are losing money everyday by the gov't handling it. Its about time someone fixes that.

Steve