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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28082
Experience:  Taxes, Immigration, Labor Relations
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I make $43000. a year, 55 years old, and do not have any investments

Customer Question

I make $43000. a year, 55 years old, and do not have any investments or retirement. I have $40000. and do not know whether to buy or rent. I have 2 children that are living with me that are 23 and 21 years old. Please advise.
Thank You,
G
Submitted: 7 months ago.
Category: Tax
Expert:  Lev replied 7 months ago.
I assume that your children are still in collage - and do apply for financial aid - so having assets or investments might affect their eligibility.With that in mind - if you do not own a home - and do not expect to move to a different area - you might better to use the money to purchase a home.If you are thinking about long term investment - I might suggest to start with Roth IRA.
Expert:  Lev replied 7 months ago.
That would not provide any immediate tax saving because Roth IRA contributions are not deducted on your tax return - but consider your low tax bracket (as you are likely claim your children as dependents) - that should not be an issue.The advantage of having Roth IRA is that potentially any earning would not be taxable and you will not be subject to required minimum distribution.The disadvantage is that you must keep that account for at least 5 years.For 2015 and 2016, your total contributions limit is $6500..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.