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1.
Which of the following will a financial aid office consider most important?
Your income. Financial aid offices consider this the most important of all these options.
2.
What kinds of investments can you transfer to an UGMA account?
All of the above. You are allowed to transfer any of these to an UGMA account.
3.
Prepaid tuition plans usually invest in _______.
Bonds. Prepaid tuition plans usually invest in state-backed bonds, because they aim only to keep up with rising in-state university costs.
4.
After you have saved for many years to send your young one to college by investing in high-risk assets such as stocks, you would be wise to shift them to bonds as college gets closer.
True. Given that you don't want to risk your growth in a downturn, shifting your gains to bonds or bond mutual funds might be a good idea.
5.
Assuming they are used for qualified educational purposes, withdrawals from a Coverdell education savings account are _______.
Tax-free. Contributions are taxable, but qualified withdrawals are tax-free.
6.
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.
7.
Section 529 plans are sponsored by _______.
States. States set contribution limits and investment guidelines that the plans must follow.
8.
The IRS gets to decide how you spend the money in your Roth IRA.
False. Though the IRS sets restrictions on Roth IRA use, ultimately you get to decide how to spend the money in it.
