Roth IRA contributions

[Guest nesby]

Hello, my wife and I were thinking of getting a Roth IRA and a Coverdale IRA for the little guy's college. I know the max input is $3,000/year, but is that for all IRA's combined, or can I invest $3,000 in the Coverdale AND $3,000 in the Roth each year? Thanks.

[Michael Devault]

Contribution limits for traditional/Roth IRAs are combined and are limited to a cumulative $3,000 per year per individual. If you're 50 or older, there's an additional $500 catch-up.

Contribtions to Coverdell accounts are not aggregated with IRA/Roth IRA contributions. If fact, you may make a maximum contribution to a Coverdell account for each child. However, any contributions from others, such as grandparents, etc., must be combined so as not to exceed the maximum annual contribution for each child.

By the way, I believe that the maximum Coverdell contribution is $2,000 and not $3,000.

Hope this helps. Good luck!