Whats the difference between a 529 plan and a Coverdell Education Savings Account?
Hurley: The Coverdell can be withdrawn tax-free not just for college, but also for K-12 education expenses anything from tutoring and tuition to books and home computers. You’re limited to $2,000 per year per child, whereas there are no annual limits with the 529. Each 529 plan established its own overall account-balance limit; the highest right now is $305,000 in South Dakota. The Coverdelll has age limits on the beneficiary he or she must be under 18 and the account must be used by the time the beneficiary is age 30. With a 529 you can set aside money to return to graduate school yourself. With the 529, the state handles investment options. With the Coverdell, you do. Miller: A Coverdell is a child’s asset. When I have worked with families that want their children to attend private school, I advise them to use the Coverdell for tax-advantaged money for elementary and high school years, and a 529 plan for college. Pre-Paid Plans and Age-by-Age Advice Q. What about pre-paid tuition pla
Related Questions
- Can I contribute to a 529 savings plan, a Coverdell Education Savings Account and a College Illinois! Prepaid Tuition Program plan at the same time?
- Can I roll my existing Coverdell Education Savings Account into a 529 plan account?
- Whats the difference between a 529 plan and a Coverdell Education Savings Account?
