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Roth IRA

What It Is
This is a tax-deferred retirement vehicle that can be used by parents who will be at least 59 years old when their kids are in college. You can invest up to $3,000 a year, 4 times the amount of an Education IRA.

The Benefits
Since you can invest up to $3,000 a year, given enough time, a Roth IRA has to the potential to grow into a very substantial sum. You can with draw as much money as you need, provided the account has been open for at least 4 years and you are 59 years old.

The Risks
Prior to age 59, you can tap into the money that you've contributed (but not the interest or increase in value). As long as it is used to pay education-related costs, there is no early withdrawal penalty.

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