Education IRA: 3 Common Mistakes to Avoid for Your Child's Future

The education IRA is an account that allows you to save in a tax-advantaged account for education expenses. When using this type of account, there are certain things that you will want to avoid.

1. Risky Investments

When using an education IRA, you will want to make sure that you avoid investments that could be considered too risky. You are saving money for a child's education in this account. Therefore, this is no time to take unnecessary risks. You are basically gambling on your child's future if you decide to take on extra risk. This means that you should try to stick to proven investments that can provide a steady return.

2. Unnecessary Expenses

With the education IRA, you have some flexibility as to what you can spend the funds on. You do not have to use the funds only on tuition as with other education savings accounts. However, that does not mean that you should use the money on every possible education expense along the way. Try to handle some of the smaller expenses out of your pocket instead of taking money out of investments in this account.

3. High Fees

You should also shop around, comparing brokers to make sure that you are getting the best deal on fees. Otherwise, much of your child's education money will go to your broker.