Safely Save for Your Childs University Studies Using An Education IRA!

This investment retirement account (IRA) is useful to you as an investor to understand because it may be a good way for you to save for your kid's education AND save on taxes. These plans are now called Coverdell Education Savings Accounts in honor of the late U.S. Sen. Paul Coverdell. Individuals can make annual contributions of up to $2,000 per child into an account that's exclusively for helping to pay higher education costs. The money contributed to a Coverdell account doesn't count against the $3,000 ($3,500 if 50 and older) annual total individuals may contribute to their combined personal individual IRAs.

The earnings and withdrawals from a Coverdell account are tax-free, but you can't deduct the contributions from your income tax because the account is for the benefit of the child, not the contributor. This is great for parents who are good savers and investors who want to make an annual tax-saving contribution that they can invest in the stock market toward the education of a studious and responsible child. In addition, if your child received a Coverdell ESA distribution, you now can also claim Hope Scholarship or Lifetime Learning credits. Just make sure you don't use Coverdell money to pay for the same expenses you use to claim an education credit.

The beneficiary (your child) of the education IRA must withdraw the funds by age 30 if they don't go to college and pay taxes and penalties on it. However, the account can be transferred to a sibling or the beneficiary's child if they don't pursue a higher academic degree or use it all.

Once you have the account open you can use the stock market to help finance your child's education selling the stock at a high price after you have bought it at a low price using techniques such as I teach.

ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. "The Wallet Doctor", is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors by teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term "Irrational Exuberance." In 1998 he shouted to the world to "get out" of the stock market but now he is shouting to everyone that it is time to "get in!" The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing.

Visit Dr. Brown's site at http://www.BonanzaBase.com or sign up for his investment tips at http://www.WalletDoctor.com

In The News:


10 Tips to Make Sure Your Financial Budget Will Succeed

You've analyzed your past expenses, put them into spreadsheets, loaded... Read More

I Want to Buy a Home - Now What?

If you were to ask 100 women "What would you... Read More

Budgeting your Savings - Did You Let Your Piggy Bank Get Away?

I think most of us have at some point in... Read More

How To Protect Yourself Against Identity Theft

Identity theft is a serious crime that continues to grow.... Read More

Whats The Truth Behind Your Finances?

Between 15 - 20% of people in our country (UK)... Read More

Help With My Annuity

The cries are heard from the distance, "I need help... Read More

Learning the Basics of Handling Money

With prices increasing all the time, saving money can be... Read More

The Wright Place - Finances

Women have a love/hate relationship with money. Most of us... Read More

Healthy Eating On A Budget

It is possible to eat a healthy, balanced diet without... Read More

What is ChexSystems?

Commonly referred to as the first of the three major... Read More

Organizing Your Finances - Thinking Outside the (Shoe) Box

If you're like most people, your personal financial records are... Read More

Budgeting Tips to Save Real Money

Sticking to a budget can be difficult, but with so... Read More

Budgets And Eating - Can They Co-Exist?

Whatever your reason for having a tight budget, the truth... Read More

Photo Checks ? A Great Alternative in Checking

It's the little things in life that make it interesting.... Read More

If I Had a Structured Settlement, I Would Use It to Pay for Gas

Has anyone been to the gas pumps lately? Soon $3... Read More

Personal Loans For Homeowners ? One Of The Numerous Rewards For Being A Homeowner

You no longer look at the pictures of homes cause... Read More

Save On Food - Ten Tips

To save on food, be an opportunist. Buy what you... Read More

Budgeting: A Tough Love Way to Handle Your Household Budget

Developing and living by a household budget is by far... Read More

Understanding Your Finances Can Give You Power And Choice

What is finance and what do you need to know?... Read More

Knowing Me, Knowing You: Why ID Protection Plans Are Flawed For Fraud

ID theft is a major consumer concern, though there is... Read More

How to Draw a Personal Budget that Works

Many people spend their little income haphazardly without any planning... Read More

Benefits of Personal Finance Software

In this age of information, keeping track of your finances... Read More

Introduction to Australian Superannuation

Australians, in general, constitute some of the worst savers in... Read More

Identity Theft is a Major Problem: Whose Responsibility is It to Protect the Consumer?

We have heard a lot about consumers' personal information getting... Read More

Budgeting the Key to being Financially Stable

Single Mother's in need of Financial GuidanceBudgeting is key to... Read More