Another Way to Save for Education

Coverdell education savings accounts can be used for a bigger menu of education costs than 529 savings plans.

Is it worthwhile to invest in an education IRA for my son? Where can I open one?

Coverdell education savings accounts (what education IRAs are now called) aren’t the best way to save for college, but you can use the money for qualified education expenses for elementary or secondary school (such as private school tuition, tutoring and other expenses). A 529 college-savings plan is a better bet for college savings because contributions aren’t capped, but funds in a 529 can only be used for college or graduate school.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.