I'm looking for an investment vehicle that provides the following, and am wondering if a Roth IRA would fit.
a) to be used to provide money for college for my nieces and nephews.
b) money invested would grow tax-free
c) money could be withdrawn tax-free, with no penalties
d) money would be under my control in my name (ie. if a kid doesn't go, then they don't get anything).
I thought about an Education IRA, but then that would hurt their chances for financial aid (and they could withdraw that money and not use it for college, after paying taxes and penalty). Any year that a withdrawal is made, then Hope scholarship credits ($1500/year) can't be taken.
I have read that you can withdraw from an IRA penalty-free for educational expenses for yourself, spouse, children, grand-children.
Does that apply to nieces and nephews as well?
I could give money to their parents to put in a Roth, but then their is a risk that they would withdraw it and spend it.
Thanks,
Kurt |
