Consider opening a Coverdell ESA for additional college investing. Formerly called the Education IRA, the Coverdell ESA is an investment vehicle that is exempt from income taxes as long as the funds are used for educational purposes. The maximum contribution to a Coverdell ESA is $2,000 per year for each account open. You can open a separate account for each of your children if you want. When they turn 18, however, they are given control of the money. They still have to use it for educational expenses, but how they do so is their decision. Besides college expenses, money in a Coverdell ESA can be used to finance elementary and secondary school costs including uniforms, transportation, and study materials.

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