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SIE: Investment Companies & Packaged Products
SIE practice questioneasy529 Plans

Which of the following statements about 529 college savings plans is TRUE?

  1. AThey guarantee the beneficiary’s education expenses will be covered.
  2. BThey are only available to institutional investors.
  3. CThey offer tax-deferred growth and tax-free withdrawals for qualified education expenses.✓ Correct answer
  4. DInvestment choices cannot be changed once established.
Explanation

Why CThey offer tax-deferred growth and tax-free withdrawals for qualified education expenses.

529 plans provide tax-deferred growth and tax-free withdrawals for qualified expenses. They are available to the public, do not guarantee costs, and allow for some investment changes.

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