Re: Can IRAs be used for college saving?

From: Jeff Salisbury <jeff.salisbury@xmission.com>
Subject: Re: Can IRAs be used for college saving?
Date: Mon, 24 Jan 2000 18:39:52 -0700

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Paul Slonaker wrote:
> 
> The most recent Consumer Reports has an article on saving
> money for college.  It says that a Roth IRA can be used,
> under some circumstances, for educational expenses.  What
> about a regular IRA?
> 
> -- Paul Slonaker (pes@averstar.com)
> -- AverStar, Inc.
> -- 23 Fourth Ave., Burlington, MA 01803
> -- Phone: 781-221-6990 x4619  Fax: 781-221-6991
> 
> -

Paul,

With a regular IRA, you can also take out money before age 59 1/2 to pay
for qualified education expenses (tuition, fees, books, supplies; and
room and board if the student is enrolled at least half-time) and avoid
the 10% penalty.  However, the money you take out will be treated as
taxable income.  Roths can be good, particularly if you will be taking
the money out after 59 1/2.  Otherwise, you will pay taxes on the
earnings or growth of the Roth.  For more details, see:

	http://www.fairmark.com/rothira/college.htm

Best Regards,

Jef

- -

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