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Course 210: How to Invest for College | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Traditional IRAs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Along with creating the Education IRA, the Taxpayer Relief Act allowed investors to draw on traditional IRAs for education expenses without incurring early withdrawal penalties. Acceptable uses for traditional IRA proceeds include tuition, supplies, and--for students enrolled at least part time--room and board. The answers:
This may be a good fallback way to save for college. It isn't the ideal way, though, given your other options. If you qualify for the tax break that a traditional IRA affords, you should probably be using this vehicle as a means for funding your own retirement instead of your child's education. Next: Roth IRAs >> |
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Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores. | ||
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