As you may have already discovered, self-directed IRAs are a very flexible investment method, but did you know that you can also self-direct education savings accounts with American IRA? It’s true! Many non-traditional assets can be easily incorporated into your IRA, and today we’ll reveal one of the most powerful ways you can sow a seed into your family’s future.

The destiny of our nation is directly connected to upcoming generations. Even so, extended education is quickly becoming more and more expensive and it has never been more essential for up and coming youth who aim to succeed in life. If you want to invest in your child’s future and thus invest in the nation at large, a Coverdell Education Savings Account is one of the most effective paths to their success.

So what is a Coverdell account? Let’s begin with something that may be a bit more familiar; namely 529 plans. A 529 plan allows money to grow tax-deferred, and the proceeds can also be withdrawn tax-free for qualified education expenses at a qualified institution. Take note of the last sentence’s emphases – government regulations are very specific on these points.

Here’s what makes a Coverdell Education Savings Account different: like a 529 plan, these accounts cover colleges and universities, but unlike a 529 they also cover qualified expenses at primary and secondary schools!

According to an article on Good Financial Cents, some of the other key differences include three things:

1) Total contributions for a beneficiary can be no more than $2,000 per year

2) The account has an income limit – your adjusted gross income cannot increase above $110,000 if you’re single or $220,000 if married and filing jointly

3) A beneficiary must be younger than 18 when the account is opened and they must be spend the money before reaching 30

Keeping those points in mind, it’s never been easier to invest in the future! So, does a Coverdell Education Savings Account sound right for you?

If you have any questions about opening a new account, contact us at 1-866-7500-IRA(472) or info@americanira.com. If you’d like to transfer a Coverdell Education Savings Account, contact us at 1-866-7500-IRA(472) or transactions@americanira.com or click here for more information.

 

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