COVERDELL EDUCATION SAVINGS ACCOUNTS

The Coverdell Education Savings Account is an attractive college savings vehicle for many people. In fact, even if you like the 529 plan, you may still decide to contribute the first $2,000 of savings for each child into a Coverdell account. Contributions to the account are taxed, but earnings used to pay qualified* education expenses are not. The entire account must be dispursed before the beneficiary’s 30th birthday, and withdrawals after this date or for nonqualified expenses will be subject to income tax and penalty. Like every program, there are advantages and disadvantages. A Northwest Financial Group representative can explain them to you.

Although Coverdell Education Savings Accounts can be a good way for you to save for college, they are just one of a variety of ways to help you save enough money to send your children to college. To get help with your education planning, contact Northwest Financial Group or call us at 703-810-1072, ext. 110, for your complimentary consultation.

*The earnings portion of withdrawals used for non-qualified expenses will be subject to federal income tax, and tax penalites may apply. Tax treatment at the state level will vary.