Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
With a prepaid tuition plan, you can control what the plan invests in.
False. The state controls what the plan invests in.
2.
If you withdraw money from your Roth IRA for college expenses, you might still have to pay taxes on them.
True. Any earnings that have built up in your account will be taxed. The original contributions in the account will not be taxed, as they were already taxed in the year you put them in.
3.
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.
4.
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.
5.
How much can you contribute to a Section 529 plan?
The amount varies according to the plan. Each plan is different. Some have very high limits.
6.
Money in a Coverdell education savings account is intended for educational use and cannot legally be used for anything else.
True. This is its intended use.
7.
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.
8.
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.
