Question

One of your clients is a 24 year old student and wants to plan for paying for all of her higher education expenses. Of the choices below, which would be the most appropriate choice for your client? (A) 5 year Savings bonds (B) A Coverdell Education Account (C) A prepaid college tuition plan (D) A 529 Education Savings Plan

Answer 1

The answer is: D) A 529 Education Savings Plan

Step-by-step explanation:

A 529 Education Savings Plan is designed specifically to cover educational expenses and most important, its tax free.

Coverdell Education Accounts don't allow contributions after age 18.

If the client prepays her college tuition plan, she will only cover educational unit expenses, but not all her expenses.

A five year savings bond shouldn't even be considered for this example.