Financial Literacy: Unit 1 – Saving and Investing.

Financial Literacy: Unit 1 – Saving and Investing

 ESA  Educational Savings Account  After-tax college fund that grows, tax-free, for educational uses  HAVE MAX LIMITS  Based on Parents’ Annual Income

Type of Account ESAIRA401(k)Roth IRA / 401(k) UseEducationRetirement Pre/Post TaxPost-TaxPre-Tax Post-Tax Taxed?Tax-FreeTaxed when taken out Taxed along the way Tax-Free Max IncomeYESNO, but must have income NOYES Max Contrib. YES