Do you feel like you can’t save enough money for retirement for it to matter? Don’t fall into this trap! It often requires sacrifice and dedication to build a comfortable nest egg. And those who already have one usually grew their portfolio by taking small, steady steps. They may have started out with surprisingly modest sums of money too.

So, what would a $300 monthly purchase of an S&P 500 index fund in a tax-deferred IRA be worth 20 years in the future? More than you might think.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Slow and steady wins the race

We must make one key assumption in this hypothetical scenario — the S&P 500 will continue generating an average annual return of about 10%. Bear in mind the index’s performance in any given year can vary widely, including losses about one out of every three years.

Based on that long-term average, however, investing $300 per month in the S&P 500 should leave you with roughly $227,000 after two decades.

There’s an important footnote to add here: Assuming this money is in a traditional IRA rather than a Roth IRA, it will be taxed as as you withdraw from it. Fortunately, you don’t have to take it all out at once, and whatever remains in the account will also continue to grow tax-free.

Start with whatever you can afford

At today’s interest rates, a $227,000 nest egg will produce about $9,000 of annual interest payments. That’s not bad, but it’s not enough for most people to live on in retirement.

With that in mind, you should aim to increase your regular contributions as time goes on or start as early as possible to give yourself more than 20 years to build your nest egg. Taking the first step in your retirement planning is often the most important thing you can do.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

James Brumley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.