Update October 2020 By SNF Treasurer Greg Volitich
The SNF offers Coverdell Education Savings Accounts (ESA). Originally established in 1998 (renamed for the Senator Coverdell in 2002) is a tax-favored way to save for future education expenses. The recent Covid pandemic has increased the areas of qualified expenses with respect to education, as it is commonplace to consider remote learning as a viable option for education. This type of learning would include computers and additional electronic equipment, internet access, and of course tuition, books, fees, etc. – at this time – have been part of these plans.
Similar to the state sponsored 529 plans, both plans offer tax-free distributions as long as the money is used for those qualified educational expenses. While the 529 plans are invested in mutual funds, the Coverdell offers many other options. The Coverdell accounts offered by the SNF are invested in Fixed Interest rate annuities.
Why is this a good thing?
The market, the market, the market! How can anyone (unless extremely, financially independent) in good conscience, place their child’s education money in the market with the erratic volatility knowing it is to be used in the next few years. Given interest rates, oil prices, COVID’s impact, and bankruptcies in the market, politics – WHEW! – Why take the chance?
There are certain limitations to contributing to a Coverdell. You can check it online by searching for “Coverdell contribution limits.” There are limits to contributions based on income, filing status, and other potential issues.
Nonetheless, the Coverdell (ESA) offered by the SNF can provide a safe haven for your child’s/kumovi’s/grandchild’s/niece’s/nephew’s education funds.
- Oh, did I mention, the SNF will currently credit each Coverdell Account at 4.00%/yr. To qualify for this preferred crediting rate, the child must maintain a permanent insurance policy.
Contact the SNF Home Office at 412-458-5227 for details and make it happen today.