Coverdell ESA to meet your Kids Educational expenses
The Coverdell Education Savings Account is mainly designed as an Investment account to cover educational expenses only and it allows you to make an annual non deductible contribution to a particular Investment account. The beneficiary must be under 18 years of age when the ESA account is opened. This account will grow tax free and withdrawals from the account are also tax free. There are quite a few restrictions or limitations that apply to the Coverdell Education savings account that include: the contribution limit, contributor eligibility requirements, small maintenance fee irrespective of the low contribution limit, degree of control over the account and coordinating withdrawals with other benefits.
Advantages and disadvantages of ESA:
You can contribute to any child towards his/her Education Savings Account for education expenses. There are no such restrictions like beneficiary must be your child or in any other relationship. The contribution can be invested in any type of qualifying investment options available through the sponsoring institute and there is no limit for the number of Education savings account that you can establish for a child with the total contribution not exceeding $2,000. Also corporations, partnership firms or any other organizations can make contributions towards a child’s education expenses in an Educational saving account. To a certain extent you can have control over the account, like you can also prevent your child from using the funds for something other than college expenses. You can also move funds from your child’s ESA account to a 529 plan.
The beneficiary of the Coverdell Education Savings Account can receive tax free distributions to pay qualified education expenses and are tax free to a certain amount that not exceeding the beneficiary’s qualified education expenses as such only a portion of the amount that exceeds the actual qualified education expenses are taxable. The Education Savings Account must be fully withdrawn when the beneficiary reaches the age of 30, if not the balance amount will be subject to tax with an additional penalty tax of 10% after 30 days.
Coverdell ESA providers:
There are a number of Coverdell Education Savings Account providers all over the country. You can directly contact any one of them and the annual maintenance cost of the ESA account is about $10 or less than that. If you are associated with an Investment or Financial Advisor, then you can ask them to suggest an ESA provider. It is highly recommended to find answers and solutions for all your Investment options that are available to your child’s educational expenses from a registered Financial or Investment Advisory Agency. There are a number of Investment Advisors and agencies are operating all over the country that offers a range of advisory services on this.
About the Author
401Kid, Inc provides specialized Investment advice to families who seek expertise advice to meet their Kid’s college education expenses. 401Kid.com offers a range of web based financial advisory services through its ESP wizard 2.0 and financial calculators. Visit the website http://www.401kid.com for more information.
The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions
Here at last are the hard-to-find answers to the dizzying array of financial questions plaguing those who are age fifty and older.The financial world is more complex than ever, and people are struggling to make sense of it all. If you’re like most people moving into the phase of life where protecting—as well as growing– assets is paramount, you’re faced with a number of financial puzzles. …
The Expectant Father: Facts, Tips, and Advice for Dads-to-Be (New Father Series)
This indispensable book explores the emotional, financial, and even physical changes the father-to-be may experience during his partner’s pregnancy. Written in an easy-to-absorb format and filled with sound advice and practical tips for men on such topics as, how to make sense of your conflicting emotions, how pregnancy affects your sex life, and how to start a college fund. This volume reassur…
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Tenth Edition)
“Almost every list of must-read investment books . . . includes Malkiel’s Random Walk.” —Booklist Especially in the wake of the financial meltdown, readers will hunger for Burton G. Malkiel’s reassuring, authoritative, gimmick-free, and perennially best-selling guide to investing. With 1.5 million copies sold, A Random Walk Down Wall Street has long been established as the first book to purcha…