Coverdell Education Savings
We are dedicated to helping you prepare for your children's education. Our Educational IRA is just one more way for you to save for the future.
We can't say it enough: children represent the future of the Riverbend area. That's why Liberty Bank is dedicated to helping parents prepare for their children's education. We believe strongly in education, and our Educational IRA is just one more way for you to begin saving for college. Invest in an IRA with fixed term interest rates, variable interest rates, or money market rates.
It's easy to get started with as little as $100 up to $2000 per year. (This amount is in addition to contributions made to either Roth or Traditional IRA's.)
Educational IRA's were established in 1998 to assist in saving for and meeting some of the expenses of higher education for children under age 18.
Nondeductible contributions of up to $2000 may be made to each child's account annually. (Contributions to an Education IRA are not allowed if a contribution is made by anyone to a qualified state tuition program on behalf of the same child in the same year.)
The contribution limit is phased out for contributors who have adjusted gross income (AGI) of $95,000 - $110,000 for singles and $220,000 for married couples filing jointly.
Education IRA withdrawals used to pay for qualified elementary, secondary, and higher education expenses, such as college tuition and fees, are generally tax-free and not subject to a 10% IRS penalty for early withdrawal.
- Is it right for me?
Educational IRAs may be right for you if:
- Saving for any child whose future education is important to you
- Tax deferred growth is more important than tax deductible contributions
What if the child receives a scholarship or does not go to college? You may elect a tax-free rollover from one student's Education IRA to that of another family member. (Rollovers do not affect the annual contribution limit.)
Funds in an Education IRA must be distributed, or to another family member's Education IRA, by the time the designated student reaches age 30. If the funds are not used for qualified education expenses, withdrawals are generally taxable and may be subject to a 10% IRS penalty.