Individual Retirement Accounts (IRAs)
Coverdell Education Savings Account
A Coverdell Education Savings Account (formerly the Education IRA) allows you to
contribute into an IRA to be used for a child’s education. This account can be established
for the purpose of paying the qualified elementary, secondary or higher education expenses
for a designated child. It allows you to contribute into the account with after-tax
dollars and earnings grow tax-deferred. This account is available in
Investment* IRAs.
Who is eligible?
Any child younger than age 18 can be named a beneficiary .
How much can I contribute?
As of 2002, the annual per-designated-beneficiary contribution limit was raised to $2,000,
per year, per child from birth to age 18.
What are the withdrawal requirements?
The funds must be used by the time the child reaches age 30. Qualifying educational
expenses include tuition, fees, books, supplies, and uniforms. The assets of this
account may be transferred to a sibling's Coverdell Education Savings Account.
Invest in your future today.
A new tax law provides some very nice benefits to individuals currently saving for
retirement. Click here for
more information about the Economic Growth and Tax Relief Reconciliation Act of 2001.
Is college in your future? Click
here for tips on saving for college.
For more information about opening an IRA account at Northwest Community, visit your
nearest branch location and talk to an
Advisor today, or send
an eMail to our Phone Branch.
Back to IRAs Explained
*Securities are offered and sold by Northwest Financial Resources, and are not
insured, may lose value, and have no credit union guarantee.