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What is a Coverdell Education Savings Account?

A Coverdell Education Savings Account (also known as an Education Savings Account or ESA), is a tax-advantaged investment account designed to encourage savings to cover future education expenses.

Why consider a Coverdell Education Savings Account?

Coverdell Education Savings Accounts (ESAs) offer the potential for tax-deferred growth and tax-free withdrawals¹. ESAs can help pay for a wide range of qualified expenses. Money can be withdrawn tax-free as early as kindergarten to pay for qualified expenses like books, uniforms and school equipment. Plus, the individual who opens the account maintains direct control over the underlying investments. There is a yearly contribution limit of $2,000, and certain income limitations may apply. The flexibility of an ESA makes it a great choice for many people concerned about the rising costs of education.  

What are the main benefits?

  1. A Coverdell Education Savings Account features a contribution limit of up to $2,000 per child, per year, offering the potential for significant accumulation of funds.  
  2. With a Coverdell Education Savings Account, funds can be used as early as kindergarten for qualified education expenses associated with public, private, religious, elementary and secondary schools. This approach acknowledges that the costs of education can be a burden years before a child sends out his or her first college application. Also, provisions are in place to assist children with special needs.  
  3. To make the accounts more widely available, Coverdell Education Savings Accounts have generous income ceilings. Please see the chart below for income limitations.


Income Limitations
Adjusted Gross Income (AGI)
Filing Status
Filing Status
Married, Filing Jointly
Maximum Contribution
 $95,000 and less $190,000 and less $2,000
$102,500 $205,000 $1,000
$110,000 $220,000 $0


Note: Anyone with an AGI below $95,000 (single)/$190,000 (joint) may make the full $2,000 contribution. The contribution amount then phases down to $0 at the upper AGI limit. For example, a person with an AGI of $98,750 (filing single) would be able to make a $1,500 contribution. These phase out limitations apply only to individual contributors.

Additionally, contributions can be made for a current year up to April 15 of the following year, giving individuals more time to make contributions. 


Your Representative can help you decide if a Coverdell Education Savings Account is right for you.  

To learn more, read our product brochure about the Coverdell Education Savings Account.

1 Nonqualified withdrawals are subject to federal and state income tax and a 10 percent penalty. Contact your Representative for more information.   

Foresters Financial and Foresters are trade names and trademarks of The Independent Order of Foresters (a fraternal benefit society) and its subsidiaries, including Foresters Financial Services, Inc.    

Neither Foresters Financial nor its affiliates provide legal, tax or estate planning services. Should you require such services, you should consult a legal, tax or estate planning professional.       

For more information about any of the First Investors Funds or variable insurance products from Foresters Life Insurance and Annuity Company, you may obtain a free prospectus by downloading it from our website, contacting your registered representative, or calling (800) 423-4026. You should consider the investment objectives, risks, fees or charges, and expenses carefully before investing. The prospectus, or in the case of a variable insurance product, both its contract and underlying fund prospectus, contains this and other information, and all applicable prospectuses should be read carefully before you invest or send money. An investment in one of these products is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. 

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