Course 210: How to Invest for College
Roth IRAs
In this course
1 Introduction
2 What You'll Need
3 Choosing a College-Saving Plan
4 Education Savings Account
5 Section 529 Plans
6 State Prepaid Education Plans
7 Traditional IRAs
8 Roth IRAs
9 Uniform Gifts to Minors Act
10 Turn Tame When the Time Is Right

Thanks again to the Taxpayer Relief Act, you can also draw on Roth IRAs for education expenses.

  • Check the IRS' web site for contribution limits.
  • You can invest a Roth IRA in just about anything.
  • Withdrawals of contribution (not earnings, though) are tax-free. Contributions are subject to taxes.
  • The account is under your control. You decide how the money is spent, if at all. If your child doesn't attend college, you can use the Roth IRA to fund other goals

Using the Roth IRA as a college-savings tool suffers from the same drawbacks as using a traditional IRA for college funding. And with a Roth IRA, you can only withdraw your contributions to the account without penalty, not the gains your investments have made.

Next: Uniform Gifts to Minors Act >>

Print Lesson |Feedback | Digg! digg it
Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
Copyright 2015 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.