SIE practice questioneasy529 Plans
A primary benefit of investing in a 529 plan is:
- AGuaranteed rate of return
- BDeductibility of contributions from federal income tax
- CTax-free growth if used for qualified education expenses✓ Correct answer
- DNo investment limitations
Explanation
Why C — Tax-free growth if used for qualified education expenses
A 529 plan offers tax-free growth when withdrawals are used for qualified education expenses. Contributions are not federally deductible, returns are not guaranteed, and investment choices are limited by the plan.
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