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1.
When choosing a college-savings plan, you want _______.
Both of the above. The new crop of college-savings plans provide both a variety of return possibilities and tax savings. Evaluate both when choosing a plan.
2.
Withdrawals from an UGMA account are taxed at whose rate?
The recipient's. Withdrawals from an UGMA account are taxed at the recipient's rate.
3.
When it comes to using a traditional IRA to pay for college expenses, acceptable uses include _______.
All of the above. For room and board, however, students must be enrolled at least part-time.
4.
If you are using a Roth IRA for college expenses, who will ultimately control who gets to spend the money?
You. Unlike a few other college-savings options, you control the money in a Roth IRA.
5.
If you'll be sending your child to college in five years, her college portfolio should _______.
Resemble an intermediate-term portfolio. A college portfolio should become tamer as the student gets closer to matriculating. The idea is to protect the gains instead of angling for more.
6.
Prepaid tuition plans let you lock in the cost of college at _______.
Today's prices. One of the chief attractions of prepaid tuition plans is how they lock in college costs at current prices.
7.
What is the current contribution limit to a Coverdell education savings account?
$2,000. This is the current limit.
8.
Section 529 plans are sponsored by _______.
States. States set contribution limits and investment guidelines that the plans must follow.
