Generation X: To Be Young, Thrifty, And In The Black

Ann Farrell, a 28-year-old hydrogeologist, is one of the lucky ones. As a senior at Smith College in 1991, Farrell attended a seminar on investing early for retirement. "I remembered the figures if you started saving when you were young," she says. Indeed, the payoff is huge. Through compounding, 25-year-olds who invest $2,000 a year and stop at 34 will earn $142,000 more by the time they are 65 than someone who begins investing $2,000 at 35 and contributes $2,000 each year for the next 30 years, according to T. Rowe Price Associates.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.