http://www.fatwallet.com/t/52/773423/

Students: How to retire a with an extra million dollars ++ by making
an easy decision right now

So you're 18 now and starting undergrad, or in the middle of undergrad
and planning on graduate school? A simple decision now could add well
over $1 million to your net worth at retirement. Ok, so that was the
one liner to get your attention. So does everyone see's where this is
going? You are right...Time value of money... However, even if you
believe most students understand the potential for time value of
money, they don't think they have the necessairy liquidity to take
advantage of this opportunity. In most situations, if you are thinking
this, you are wrong...

Many FW student readers have scholarships (high correlation to gifted
students and FW members ), or their parents are helping with college
costs, ect. Many students don't need to take out all of their
available Stafford loans, and many who have thier college completely
paid for are happy to go through college with only $500 in the bank
but no student loan debt. So if you are in the situation where you
don't have much disposable, loose money apart from your beer fund, do
have a summer job making at least a few thousand year, and do have an
opportunity to take out Stafford Loans, YOU NEED TO DO SO AND HERE'S
WHY:

2007 Freshman Contribution: $4,000 (can make 2007 deposit through
April 2008)
2008 Sophmore Contribution: $5,000 (max contribution upped this year
to 5k per year )
2009 Junior Contribution: $5,000
2010 Senior Contribution: $5,000

When you retire at age 65, these investments growing at 12% interest
will be worth: (don't quibble over this illustrative rate since it is
not the majority accepted 10%, see disclaimer below)

Freshman Contribution Value: $372,203.88 Calculated with: (N=40,
I=12%, PV = 4k, PMT = 0, FV...)
Sophmore Contribution Value: $415,406.12 Calculated with: (N=39,
I=12%, PV = 5k....)
Junior Contribution Value: $370,898.32 ...
Senior Contribution Value: $331,159.21
...........................................................................­......
TOTAL NET WORTH IN 40 YEARS: $1,489,667.53 TAX FREE DOLLARS AT
WITHDRAWAL!

O ya...did I mention that your withdrawals will be 100% TAX FREE?
Therefore, this is equivilant to $2,291,796.20 in a traditional IRA
(assuming 35% income taxes)(Students, you do want to use a ROTH FOR
THIS, do some research). Also, if you are a graduate student, and will
likely earn more than the cutoff rate for a ROTH, this is a good way
to get a sizable ROTH started before you become ineligible!

So what you need to do:

1) Open a ROTH IRA - make sure you qualify to contribute (you must
have earned wages equal or above your Roth contribution, the loan does
not count as earned income ect)
2) If you qualify, but just don't have the loose $ to contribute,
borrow from your Stafford loans to fund your ROTH.
3) Invest in broad, diversfied index funds, or ETF's of index funds.
4) Watch your money average 10-12% growth over the next 40 years
5) Enjoy your EXTRA millions when you retire (in addittion to your
401k and other savings).

ALSO: Stafford Interest rates are dropping for newly issued loans, so
this is an even better plan:
2007 will be 6.12% fixed.
2008 will be 5.44%
2009 will be 4.76%
2010 will be 4.08%
2011 and beyond will be 3.4% (this is the last planned rate cut) (yes,
you can get a 3.4%, potentially tax deductible loan with rate
incentive deductions for electronic payment and good payment history
for at least a decade!).

Don't dive right into this. Do some research. Realize you are taking
out a loan, but that you don't have to start making payments until
after you graduate and the interest rate is one of the best you'll get
in your life. Take advantage of student loan debt! Learn about the
time value of money, what a ROTH IRA is, how it works. Learn about
what index funds are. Estimate if you will be eligible to take
advantage of government retirement subsidies in the future (all the
more reason to get started now). Also, understand how inflation works
and what it will do to your savings 40 years from now

I hear older people all the time say "I wish someone would have told
me about a ROTH IRA when I was younger." SO HERE, I'M TELLING YOU!
MAKE YOURSELF A FEW MILLION DOLLARS RICHER WHEN YOU RETIRE!

Disclaimers:
1) I used the 12% interest rate intentionally. it suits my goal in
this post and is not an unreasonable stretch. It does not negate the
title of my post to assume a 10% return. Draw your own conclusions, do
your own math. Is it still worth it regardless?
2) Don't forget you are taking a loan that you have to pay back. I
left this out of the math also on purpose. Again, do the math, is it
still worth it to you? (this is not really a question so much as a
statement).
3) THIS IS NOT INTENDED TO BE YOUR ONLY ATTEMPT AT SAVING FOR
RETIREMENT. Just a nice little addition