In addition to a $4,000 personal IRA contribution, any person may contribute up to $2000 per child per year to a Coverdell Education Savings Account.

You may establish an CESA for any child under the age of 18 and contribute a maximum of $2000 per year per child until the student's 18th birthday.

The money must be withdrawn by the time the child turns 30. The earnings are subject to income tax and the 10% penalty. The Coverdell Education Savings Account can also be rolled over without penalty to another member of the family, who is under age 30.