How Do You Transfer A Coverdell IRA To An SEC 529 Plan?
Both a Coverdell Education Savings Account and an SEC 529 Plan help parents and grandparents save money toward future education costs while receiving a tax benefit. Both accounts allow qualified tax-free distributions. While a child may be a beneficiary, the parent or custodian is the owner of the money. Funds distributed for non-qualified school expenses are added to income. Coverdell funds transfer to the beneficiary at age 30 if the money isn’t used, whereas a 529 Plan has no time restrictions and the funds continue to accumulate. There are no age limits for contributions in a 529 Plan either, whereas Coverdell contributions cut off when the beneficiary reaches age 18. You can move assets into a 529 Plan from a Coverdell. Open a 529 Plan at the custodian of your choice. A 529 Plan is a prepaid college savings plan administered by brokerage firms and banks. Confirm with the administrator how much your state allows you to contribute to the account; limits vary between $100,000 and $35
