<prompt> Human: Ive been a wanderer on this sub for a while and feel like its time to start asking for advice on how to start my savings. Just a bit of background info:I just turned 24 Currently working a job with 38,500 salary, benefits, and pension. I live at home but that could change if I end up accepting another job I recently interviewed for in another city. I have 16,000 in a checking account. I am currently paying down debts on college and a used car I bought a couple years ago. My high priority right now is starting a Roth ira. The only thing is Im not so sure how to do this. A lot of people on this sub are much more knowledgeable than myself about it but I know the basics. Contributions are not deductible but distributions are not taxable after a certain age. Can anyone walk me through how to get started with a Roth IRA and what making contributions really means? Its a little confusing to me but I recognize opening an account as a must.Assistant: It does seem mysterious at first, but the process isnt that hard. The hard parts are deciding where or how the money should be invested. Most folks here at this subreddit suggest keeping it simple. We suggest opening an account at Vanguard because they are a reputable company and the fees for investing your money are extremely low. A lot of research shows that keeping expenses low has a tremendous effect on how well your investments do in the long term. No one has been able to show paying higher fees produces consistent higher investment returns over the long term. The other thing that tends to unnerve people is what exactly to invest in. For retirement you are looking for a long range result. Again, research suggests strongly although not infallibly you want to diversify and have your money in a few different things, including stocks. Over the very long term, historically stocks provide a return of about 7-10. Bonds and money market type account are safer but historically have offered about 3-6 return. So putting your money in both means you will have a chance to make money even if one of these markets has a bad period. the catch has always been, out of all the stocks or bonds to pick, how will you know which to avoid and which to pick., the financial world has packaged together products such as mutual funds that will pick for you. You give them the money and they buy and sell on your behalf, for a fee. Some funds are set up with the idea that you will need the money in a specific year and some are set up with an idea you want to invest in a certain group of companies tech sector or gold mining etc. Believe it or not the specific fund you pick is less important than consistently putting money in, so I suggest finding a product that lets you automatically transfer a small amount every month and whose fees are low. you can choose 1 product or you can split between 2 or 3 funds. Seldom is there a reason to go beyond 3 funds. Fill out a form to open an account, choose 1-3 funds with low fees also called expense ratios or E.R. and set up auto investing. Remember that nothing is guaranteed but remember that you can course correct in a year or two if things really run off the rails. Retirement funds are like gym memberships. Lots of gyms out there, lots of different prices and sometimes you start at one and then you change things up but no one ever got in shape without picking some exercisesportclass and DOING it. Watching others exercise without participating is the only actual mistakeHuman: Thank you very much for the detailed reply. I think that this helped to clarify a big question I had. I thought that opening a Roth IRA and investing in stock or mutual funds were mutually exclusive activities. So by opening a Roth IRA I am investing. So if this is the case why do people invest in stocks outside of their retirement accounts and why do they have more than one retirement account? Whats the point in having a 401k and a Roth IRA? Why not just put more money into a Roth IRA?  <response>: Theres a ceiling for putting money into an IRA, its 5500year , and the 401k is 18000year before employer match. So people that fully utilize these tax-advantaged accounts and want to invest more with a bit more taxes open a seperate, taxed investing account. 