Can you do both a 529 Plan and a Coverdell ESA?
Asked 3 years ago
I'm wondering if we can run these long-term investments/savings accounts the same one would run a 401K and an IRA. Any ideas?
Andia Rispah Igobwa
Tuesday, July 06, 2021
Yes. Before you make a decision, it is important to consider the following:
- What are the state laws with 529 Plans and Coverdell ESAs in regards to custodians?
- What kind of investment are you looking for?
- What features does each account have that appeal to your needs 5 years down the line?
Other things to keep in mind include:
- What happens if I change my state residency while my child is young?
- If I use funds from one account to put them into another before they turn 18, will there be any tax penalties?
- What would happen if I take distributions from either account before the funds reach their distribution age, or what would happen if my child goes off on their own
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