The Coverdell Education Savings Account (CESA) is designed to help individuals save for the future education needs of their children or grandchildren or even a friend. Children must be under the age of 18 to qualify for a Coverdell Education Savings Account. You may make contributions for as many children as you would like, by establishing a Coverdell Education Savings Account for each of them.

• You may contribute up to $2,000.00 a year for each child per aggregate contributor.
• You must meet eligibility requirements to make a contribution (See chart below)
• You may not make a contribution if the student is enrolled in a qualified state tuition program

When a withdrawal from an Coverdell Education Savings Account is made for a higher education expense (college tuition, fees etc.) there is no IRS penalty for early withdrawal, and it is tax free . There is no tax due on your earnings (interest), as long as they are withdrawn for higher education, elementary and secondary education expenses.

If for some reason the child that the account was established for decides not to go to college, or receives ample scholarship funding, the CESA IRA may rollover tax-free from one students CESA IRA to another as long as they are members of the same family.

Funds must be distributed or transferred to another family members Coverdell Education Savings Account by the time the student reaches age 30. If these funds are not used for education expenses, the distribution is taxable and could be subject to a 10% IRS penalty.

Modified Adjusted Gross Income (MAGI)

Limits for Contribution to a Coverdell Education Savings Account

Single Filers:
Full contribution ($2,000): - - MAGI of $95,000 or less
Partial contribution: - - MAGI between $95,000 - $110,000
No contribution: - - MAGI of $110,000 or more

Married, Joint Filers:
Full contribution: - - MAGI of $190,000 or less
Partial contribution: - - MAGI between $190,000 - $220,000
No contribution: - - MAGI of $220,000 or more

*Note that $2,000 is the total dollar amount that can be contributed on a child's behalf in any given year*

It is now generally understood that if you wish to retire comfortably, you cannot solely rely upon Social Security to support even the most modest lifestyle. To help supplement your current retirement benefits, we offer an array of different Fixed Rate Individual Retirement Accounts that offer you a higher rate of return, with the interest being tax deferred. In addition, your contributions may also be deductible from federal income tax . . . check with your accountant to see if you qualify. Also, Fixed Rate IRAs allow you to make your annual contributions in one lump sum, with no additional deposits allowed until maturity.

When opening a fixed rate IRA, take advantage of a Franklin Savings Bank CD special rate with terms of 91 days or more!

• Available terms: 91 Days, 182 Days, 1 Year, 2 Year, 3 Year and 5 Year
• Opening Deposit Amounts: $1,000 for any term under 3 Years. $500 for 3 Year through 5 Year terms.

After five years, you can take qualified tax-free withdrawals without penalties for any of the reasons listed below:

• you attain age 59 1/2
• qualified first time homebuyer($10,000 lifetime cap)
• disability
• death
• and there is no tax due on your earnings as long as they are part of a qualified withdrawal!

You may wonder if you can roll your traditional IRA into a Roth. The answer to this question is yes. Please check with a qualified financial advisor to see if a conversion would be beneficial for you.

Modified Adjusted Gross Income (MAGI)

The limits for the Roth IRA

Single Filers:
Full contribution ($3,000 or $3,500 if age 50 or older): - - MAGI of $95,000 or less
Partial contribution: - - MAGI between $95,000 - $110,000
No contribution: - - MAGI of $110,000 or more

Married, Joint Filers:
Full contribution: - - MAGI of $150,000 or less
Partial contribution: - - MAGI between $150,000 - $160,000
No contribution: - - MAGI of $160,000 or more

*Please note that $3,000 or $3,500 if age 50 or older is the total amount that you can contribute to any Roth and/or IRA in a given year*

Check with your financial specialist to determine whether or not the Roth IRA is right for you!