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I have a question about an upcoming insurance settlement that my sister is expecting. She is a recent college grad doing do-gooder (low pay) work, so her income is low. Within the next five years or so she will be going back to grad school and possibly looking to buy her first house. She would like to put the insurance settlement into the most tax-friendly situation that she could still access five years down the road for a down payment.

Since she is not making much in terms of income, does it make sense just to keep this money in standard account (vs a Roth or a tax-deferred account)? She'll presumably pay some tax on it now, but that seems better than trying to get the money out of an IRA five years from now.

Any advice would be welcome. Thanks,

cheezyches
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