Can you do both a 529 Plan and a Coverdell ESA?

Asked 5 years ago

I'm wondering if we can run these long-term investments/savings accounts the same one would run a 401K and an IRA. Any ideas?

529 plan Coverdell education savings account (esa)Savings account for child Long-term investments

Andia Rispah Igobwa

Tuesday, July 06, 2021

Yes. Before you make a decision, it is important to consider the following:
What are the state laws with 529 Plans and Coverdell ESAs in regards to custodians?
What kind of investment are you looking for? 
What features does each account have that appeal to your needs 5 years down the line? 
Other things to keep in mind include: 
What happens if I change my state residency while my child is young?
If I use funds from one account to put them into another before they turn 18, will there be any tax penalties? 
What would happen if I take distributions from either account before the funds reach their distribution age, or what would happen if my child goes off on their own