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We are planning to buy our first house in about 2 years when our contract here is up. We have some money saved, but it isn't clear to me if there would be any advantage to putting it into a Roth IRA. Would any kind of IRA give us a tax advantage for a home purchase in such a short period of time?

Or would a simple combination of investments make more sense for this time period?

We can afford the risk of investing this money, but I'm not sure what the best move is financially.

Thanks for any suggestions,
L. Allender
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Greetings, L. Allender, and welcome.

<<We are planning to buy our first house in about 2 years when our contract here is up. We have some money saved, but it isn't clear to me if there would be any advantage to putting it into a Roth IRA. Would any kind of IRA give us a tax advantage for a home purchase in such a short period of time?

Or would a simple combination of investments make more sense for this time period?

We can afford the risk of investing this money, but I'm not sure what the best move is financially.>>

Deposits to a Roth or a traditional IRA won't help much. Between you and your spouse the most you will be able to deposit will be $8K. You can withdraw that for a first-time home purchase of course, but it hardly seems worth the effort of establishing an IRA to do so. Two years is a very short time within which to use the money, which means you want a very conservative investment to protect it. You know you'll need the cash, so you don't really want to put it at risk. Therefore, IMHO your best bet is to stash it in taxable CDs, money market accounts or short-term bonds. There's little risk and some earnings in those vehicles.

Regards....Pixy
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