Find answers to the top Nationwide Bank IRA and ESA questions
Q. What is the difference between Traditional and Roth
IRAs?
A. With a Traditional IRA, you may be eligible for a tax deduction for
contributions. You also have the potential for tax-free compounded
growth, but you’ll pay taxes when you make a distribution. With a Roth
IRA, your contributions are not tax deductible but your earnings are
tax-deferred.
Q. If I switch jobs, can I open a rollover IRA with Nationwide
Bank?
A. Yes, if your previous company offered an employer-sponsored
retirement plan, such as a 401(k), 403(b) or 457. You can rollover your
qualified retirement plan directly into a Nationwide Bank IRA.
Q. What is a Coverdell Educational Savings Account?
A. A Coverdell ESA is a way to save money for educational expenses.
Earnings in the account grow tax-deferred and can be withdrawn tax-free
for tuition, fees, books, supplies, computer equipment, and room and
board. Money withdrawn for any other purpose is taxed and is also subject
to a 10% penalty.
Q. What are the rules surrounding the Coverdell ESA?
A. Here are some of the features of a Coverdell ESA:
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You can set up an account on behalf of any child, not just your own.
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You can contribute for children under 18 years of age.
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You must use the money by the time the child reaches age 30 (or
transfer it to a younger sibling).
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You can use the money for qualified expenses at elementary and
secondary schools, as well as colleges, whether private, public,
secular or religious.
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You can set up an account for the education expenses for a beneficiary
with special needs (age limitations don’t apply in such circumstances).
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Maximum annual contributions are $2,000 per child from all sources.
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You can contribute even if you’ve reached the maximum contribution
level for a Traditional or Roth IRA.
Learn more about Nationwide Bank’s terms and conditions.
