<prompt> Human: HiPaid off my mortgage a few years ago in my 40s, and Ive been using the money that used to be my monthly mortgage payment to aggressively catch up on retirement savings, which I neglected when I was younger. My job offers a 401k, so Ive been putting the maximum amount per year 18k into that. But I still have money left over, so last autumn I opened an IRA too, through Vanguard. It is a Traditional IRA Brokerage, and when I click on that on the Vanguard web site it tells me that my money is in a Vanguard Prime Money Market Fund. My understanding is that I can put 5500 a year into this. So last year, for the first time, I put that 5500 into this Vanguard account. I entered that amount on line 32 of my 1040, reducing my adjusted gross income by 5500 last year. I plan to do the same each year for as long as I am able, giving me a total retirement investment of 23,500 18k on the 401k plus 5500 on the IRA per year.Question 1:Seems like I already paid taxes on that 5500 when I earned it, but then by subtracting 5500 from my adjusted gross, I increased the amount of my tax refund, so does the taxation work out even? Or does some financial voodoo work foragainst me? I know that Ill be taxed when I withdraw this money in retirement, so I dont want to pay anything twice.Question 2:Is there a more effective method of utilizing an IRA for retirement savings, or am I more or less doing this properly?Thanks!Assistant: Q1: Yes, you deducted the contribution from your income.Q2: Actually invest in something. Money market is just cash-equivalent and itll earn interest only slightly better than your checking account. Have you looked at Target Retirement 2040 ?Human: Thanks for the speedy reply.To clarify Q2, did I set something up wrong when I created the IRA on line, and is this something I can change so that I am, as you suggest, investing in something?  <response>: You created a brokerage account, which is good. It can hold many kinds of investments. If you dont choose what to invest, the default is to stay cash in the money market.You can buy or sell investments anytime. 