Education costs rising with 529 plans and Coverdell IRAs
The College Board reports four year public university costs at 8470 per year. A four year total exceeds 80000. By 2002 Education IRAs and 529 plans offer tax free growth and higher contribution limits. Coverdell accounts allow tax free earnings and usable distributions for some primary and secondary education as well.
MENTIONED IN THIS ARTICLE
Coverdell Education Savings Account
Tax Catch-up Contributions for Employees Age 50 Plus
Employees age 50 and older can make catch-up contributions to employer sponsored retirement plans. For 401 k, 403 b, SARSEP and 457 plans, catch-up adds 1000 annually from 2002, rising by 1000 each year to 5000 in 2006 with special rules in the final retirement years. SIMPLE IRAs allow 500 catch-up from 2002, increasing by 500 yearly to 2500 in 2006.
Municipal bonds offer tax-free income and steady returns
Municipal bonds provide regular interest from cities and states to fund public projects like schools and roads. They offer tax-free federal income, fixed long-term yields, and lower volatility, contrasting with taxable bonds after tax. Rolling retirement plan distributions into an IRA avoids current taxes and defers them until withdrawal, with systematic withdrawals possible after age 59½.
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