Quoted: So what exactly happens to the money you put in an IRA? Its invested, but into what and by who? Do I decide what to invest in, or does the company I set up the account with decide on thier own.
Also is there any benefit to setting up an IRA with one company over the other.
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Here is my advice. It is free, so take it for what it is worth:
1. If Walgreens offers matching on their 401k, you should contribute the maximum necessary to get the match. My employeer matches 50% of the first 6%. It's free money so take it.
2. Roth IRA is the second vehicle I suggest. The Roth is "after tax' money. But all proceeds are tax free for life. Since you are 24, you have 25 1/2 years before you can take the proceeds out. So, if you put $4k per year in, you can take the original $4k out without penality. If your $4k makes $1k. That $1k must wait until you are 59 1/2. See Roth IRA rules.
The great thing about a Roth IRA is that the proceeds are non-taxable after 59 1/2. So, if the gov't has to raise tax rates to 50% or more to pay for the babby boomers social security, your 401k distributions are taxed, your Roth distributions are not.
If you set up a Fidelity Roth IRA account, you determine what to buy with the money. There are hundreds of mutual funds you can buy with the account. By having a Fidelity account, you can move between funds when you want to.
Bottom Line: If you are employeed, no matter what your age, everyone should be doing steps 1 and 2 above. IMO, doing the two steps above is even more important than getting out of debt.