Considerations
In most cases, a traditional IRA can be used to fund college expenses such as tuition, room and board, books and supplies. Assets can be withdrawn from this account without penalty, but may be subject to federal income tax at that time. However, since you usually take a deduction when you contribute to an IRA, you are contributing pre-tax dollars to this fund, which then accumulate tax-free until withdrawal - a double benefit. There are some limitations: only certain taxpayers can set up an IRA - usually those below a specified adjusted gross income level, who do not have a formal retirement plan at work. But in instances where a child works, the child can also set up and contribute to an IRA, which can then be used to cover college costs as well.