Hi Travis, Great video and info on ESA's. My question is what happens if my kid doesn't need all the money in the ESA for college. Maybe he gets a scholarships. What happens if we want to take the money in the ESA out for other purposes?
He can use it for graduate school if he's interested in advanced degrees. The money can be transferred to another child or even to your grandkids, assuming that your kid produces one with educational expenses.
we wear the mask is not correct. You can use it for unqualified educational expenses, but you will pay a penalty and federal income taxes on a portion of the earnings. The key word here is the "earnings" and not the total money you saved.
@@diegolara4202 Yes, there are less tax-efficient options as well but you wouldn't be asking for advice if you wanted to make a sub-optimal move. What's your current position? If you haven't started the ESA, perhaps you should consider the Roth IRA instead. You can take money out for college or for a first time home purchase but worst case, he'll probably need to retire eventually. Not to mention, if your ESA and/or 529 are funded well, he won't qualify for some grants and scholarships. Ofcoarse if you've already gotten into funding an ESA well and your son doesn't need it and you can't pass it along to siblings or other generations ... the cash out is always an option, albeit the worst one.
You can withdraw the money from the ESA if your child earns scholarships. So. say they receive a $10,000 scholarship each year for their undergraduate degree you can take out $40,000 without penalty.
Great video Travis , thank,you for explaining , pls continue doing more videos . Sometimes it helps if you give an example for some visual learners. My question is the same as Alejandro
01/21/21. Travis, Is it possible that the yearly contributions to a clover dale ESA could be exempt from the 5 year look back on Medicare spend down. Due to age and limits of contributions of 2K yearly.
@@TravisSickle I’m 78 and want to help my grandkids go to college. They have 9 and 10 yraers to go before starting. I have looked at 529 s - both prepaid and savings as well as
Coverdale ESA I’m to old and have no taxable income neither do the grandkids so no qualifying for an IRA IR Roth. I want the kids not to lose financial aid elegibility.and by the same token if I have to go into a nursing home I have spendown and Medicare 5 year look back and don’t want the kids to lose what I’ve given them if I run out of money at the nursing home
Thanks for posting this! Have you had parents experience issues with coverdells and 529 accounts now that both can be withdrawn from for k-12 expenses? We are applying for financial aid for private elementary, and I’ve seen in the faq that children’s accounts are considered liquid (up for grabs) assets to be mined before financial aid would kick in. This of course horrifies me because previously the 529 money at least would have been sheltered. By unlocking it, the trump administration essentially undid the tax deferred safety of those funds to grow without being spent, it would seem? Thanks so much for your input here!
Sickle Hunter Financial Advisors I’m not sure that there is another beneficiary in our case (no time or inclination to pop out another baby). I realize this may be a “special” problem we are having this year, but basically, in a lucrative year my daughter was born and we maxed out contributions to her into college accounts...now that we are on a tighter income and might qualify for aid, that money is now accessible in the mind of admissions officers in k-12. It works against us in the aid equation instead of being considered set aside for college and long term growth. A future video on this would be great. Now is applications and interview time for the private schools and decisions usually come out in March. Deposits are requested right after tax season. 😕
hi... great video.. i have a question. I have a child that will be going to college in 5 yrs. If I set up an ESA right now and uses this money later lets say for example towards her medical school and in the meantime use other means like scholarships, will opening an ESA be ok?
Can I transfer the coverdale EAS to another child even if I have already saved $2000 per year into the new child's coverdale esa? Wouldn't that effectively have me saving more than $2000 per year for a younger child? Is this allowed?
Thanks
Welcome
Hi Travis, Great video and info on ESA's. My question is what happens if my kid doesn't need all the money in the ESA for college. Maybe he gets a scholarships. What happens if we want to take the money in the ESA out for other purposes?
He can use it for graduate school if he's interested in advanced degrees. The money can be transferred to another child or even to your grandkids, assuming that your kid produces one with educational expenses.
we wear the mask is not correct. You can use it for unqualified educational expenses, but you will pay a penalty and federal income taxes on a portion of the earnings. The key word here is the "earnings" and not the total money you saved.
@@diegolara4202 Yes, there are less tax-efficient options as well but you wouldn't be asking for advice if you wanted to make a sub-optimal move. What's your current position? If you haven't started the ESA, perhaps you should consider the Roth IRA instead. You can take money out for college or for a first time home purchase but worst case, he'll probably need to retire eventually. Not to mention, if your ESA and/or 529 are funded well, he won't qualify for some grants and scholarships. Ofcoarse if you've already gotten into funding an ESA well and your son doesn't need it and you can't pass it along to siblings or other generations ... the cash out is always an option, albeit the worst one.
You can withdraw the money from the ESA if your child earns scholarships. So. say they receive a $10,000 scholarship each year for their undergraduate degree you can take out $40,000 without penalty.
Great video Travis , thank,you for explaining , pls continue doing more videos .
Sometimes it helps if you give an example for some visual learners.
My question is the same as Alejandro
Can I do both a Coverdell ESA and 529 to plan for 3 kid's college in 4-10 years from now?
Yes, the numbers don’t aggregate…coverdell has income limit.
I have the same question as
Alejandro Reyes - below.
Could you please answer the question, thank you.
@Travis Sickle -- Can you buy a car with the account? So you can get to school?
No
My dad made me a coverdell account, I'm not planning on going to college, only trade school how does that work?
01/21/21.
Travis,
Is it possible that the yearly contributions to a clover dale ESA could be exempt from the 5 year look back on Medicare spend down. Due to age and limits of contributions of 2K yearly.
I don’t understand your question.
@@TravisSickle I’m 78 and want to help my grandkids go to college. They have 9 and 10 yraers to go before starting. I have looked at 529 s - both prepaid and savings as well as
Coverdale ESA I’m to old and have no taxable income neither do the grandkids so no qualifying for an IRA IR Roth.
I want the kids not to lose financial aid elegibility.and by the same token if I have to go into a nursing home I have spendown and Medicare 5 year look back and don’t want the kids to lose what I’ve given them if I run out of money at the nursing home
Use the 529 plan.
Thanks for posting this! Have you had parents experience issues with coverdells and 529 accounts now that both can be withdrawn from for k-12 expenses? We are applying for financial aid for private elementary, and I’ve seen in the faq that children’s accounts are considered liquid (up for grabs) assets to be mined before financial aid would kick in. This of course horrifies me because previously the 529 money at least would have been sheltered. By unlocking it, the trump administration essentially undid the tax deferred safety of those funds to grow without being spent, it would seem? Thanks so much for your input here!
Sickle Hunter Financial Advisors I’m not sure that there is another beneficiary in our case (no time or inclination to pop out another baby). I realize this may be a “special” problem we are having this year, but basically, in a lucrative year my daughter was born and we maxed out contributions to her into college accounts...now that we are on a tighter income and might qualify for aid, that money is now accessible in the mind of admissions officers in k-12. It works against us in the aid equation instead of being considered set aside for college and long term growth. A future video on this would be great. Now is applications and interview time for the private schools and decisions usually come out in March. Deposits are requested right after tax season. 😕
hi... great video.. i have a question. I have a child that will be going to college in 5 yrs. If I set up an ESA right now and uses this money later lets say for example towards her medical school and in the meantime use other means like scholarships, will opening an ESA be ok?
Yes, aside from the low contribution limits relative to other types of savings account it’s still good.
Can I transfer the coverdale EAS to another child even if I have already saved $2000 per year into the new child's coverdale esa? Wouldn't that effectively have me saving more than $2000 per year for a younger child? Is this allowed?
A contribution is not the same as a balance transfer. Therefore, you're good to go.