Coverdell Savings Account

The previous poster was correct. ESA and 529 are not the same thing. I have attached a comparison table for you.

Coverdell ESA
$ 2,000 per year may be invested as long as your income is less than $ 110k per year (filing single) or $ 220k per year (joint statement)

You can use them for primary and secondary schools.

Can be transferred to 529, but may be required to pay penalties and costs.

He is a student for the student so he can apply in the calculation of financial assistance. Moreover, it is money from the child when they turn 18 so if they do not want to go to school, it would be their choice. They could withdraw the money and move to Europe if they wish.

529 (prepaid and savings plans)
I do not recommend prepaid because it would be difficult to guess which institution your child can go to later.

A great advantage of the 529 is it is not right so the child does not apply in calculating financial aid (though some might, but not as much as Coverdell)

You can use it for college and not the primary and secondary schools.

You can deposit up to $ 11k per year or $ 55k front-loading (which means you can not file anything for 5 years). Most plans have limits of $ 100k-$ 300k max contribution to life.

In some states, there is an advantage. Visit the previous poster (www.savingforcollege.com) for more details.

You're not stuck to your state. So, if your condition does not propose a tax benefit, you should do the trick. I left the States with the Vanguard fund or DFA (Dimensional Fund Advisors) or the lowest cost.

States to consider are Nebraska, Utah, West Virginia. The best low cost and with many options. Each state has specific plans, so I joined others, you may want to watch.

HTH

Coverdell education savings accounts are very different from 529 accounts. They have different amounts of maximum contribution, various limitations on investments and expenditures that may be used. For example, Coverdell can be used for primary and secondary school expenses, while only 529 are limited to the costs of college. See the following article in Kiplinger describing the differences in detail.

http://www.keepmedia.com/pubs/Kiplingers ...

Coverdell is the official name of the plan of 529 colleges. It is a state sponsored education savings with certain tax advantages. Check www.savingforcollege.com for more details.