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Coverdell Education Savings Account

Designed to grow and protect money that you set aside for educational expenses, the Coverdell Education Savings Account (formerly known as the Education IRA) is a convenient and effective way to save funds for college for all those who qualify.  

You can make full contributions to a Coverdell Education Savings Account on behalf of a child under the age of 18 unless you are:

  • An individual who makes between $95,000 and $110,000
  • A married couple that makes between $190,000 and $220,000

(For individuals or couples in these income ranges, your contribution will be phased out.)

Advantages  

Tax-free withdrawals
Earnings on investments and withdrawals are tax free, provided distributions are used to pay for qualifying education expenses.

Flexible contributions
Even if you are currently funding a 529 College Savings Plan, you may still make contributions of up to $2,000 per year to a Coverdell Education Savings Account.

Ease of transfer
Funds in a Coverdell Education Savings Account that are no longer needed can be rolled into a second account for another eligible family member without experiencing any adverse tax consequences.




Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America, 1701 1st Avenue, Rock Island, IL 61201, 309-558-3100. Member: FINRA, SIPC. Products are available in most states. Individual representatives may not be licensed to sell all products.

529 College Savings Plan earnings grow tax deferred, and withdrawals for qualifying higher education expenses are free from federal income tax. If the distributions are non-qualifying, the earnings portion may be subject to income tax and a 10 percent penalty. Consult your tax advisor.

Coverdell Education Savings Account earnings grow tax deferred, and withdrawals for qualifying education expenses are free from federal income tax.  If distributions are non-qualifying, the earnings portion may be subject to income tax and a 10 percent penalty.  Earnings become taxable if assets are not distributed or transferred by the time the beneficiary reaches age 30.  The 10 percent penalty may be waived in certain circumstances.  This benefit is set to expire Jan. 1, 2013, unless extended by Congress.  Consult your tax advisor.




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Financial Aid and Scholarship Resources
Find college scholarships and grants on these Web sites:  

Federal financial aid
To apply, fill out your Free Application for Federal Student Aid (FAFSA) online at:
fafsa.ed.gov  

United States Military
For more information on tuition assistance through the United States military, go to:
todaysmilitary.com

Additional resources
For more scholarship and financial aid information, visit these helpful Web sites:
 
FinAid:
finaid.org; collegeplanning.org

CollegeNET: collegenet.com

FastWeb:
fastweb.com

College Board
On-line:
collegeboard.com




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