I just signed up for a Roth IRA at E*Trade to begin saving for my retirement. Yes, I have read John Piper and do not intend to retire on a yacht or senior living community and play golf and bridge all day long. I will be working for a long time certainly. However, it still would be wise to plan for decreased earning potential (or at least allow myself the ability to give away or volunteer). You do not see many old guys working as cutting edge software developers.
Roth IRAs are an incredibly great deal. A traditional IRA is tax-deferred, which is nice because you can put pre-tax income into it and you get taxed as it comes out. This is better than a no-IRA plan, to be sure. In contrast, you put post-tax income into a Roth IRA but pay no tax on your gains! You are only taxed on your principle–if you’re young then your tax rate is probably pretty low anyway. This makes them one of the best and easiest ways to beat the tax man other than offshore tax shelters. Lets say you can get an 8% return using efficient ETFs. Your money will double in about 9 years. To make the math easy, lets say 10 years to double, factoring in risk and some higher inflation. With 40 years of investing, your money will double 4 times. That’s not 4x larger, thats 2^4, or 16x larger. So I put in $1000 after taxes. If the market grows as it has over the previous 40 years for the next 40, I will be taking out $15,000. And that’s a conservative estimate. With an 11% rate it would be $60,000 coming out. I just found that really cool.