Covering College Expenses
Attending private school and college is expensive. Wouldn’t a savings account dedicated to these costs make it easier to pay out-of-pocket? The Coverdell Education Savings Account (ESA) is a savings option for primary, secondary or higher education costs1.
The Coverdell ESA
This account is a tax-advantaged strategy to help save for a child’s future. You can file singly or jointly to open the account.
Anyone can make contributions to the ESA, whether it be parents, grandparents, aunts and uncles or friends. Tax- and penalty-free earnings up to $2,000 per year per child under the age of 18 can be invested. Aside from contributions for a Traditional IRA, Roth IRA or employer-sponsored retirement plan, full contributions may be made to the account.
¹ Qualified Coverdell Education Savings Account distributions are not subject to state and local taxation in most states. Earnings accumulate tax- and penalty-free as long as the assets are used to pay qualified education expenses and are withdrawn before the child turns 30.