Final answer:
The answer to the student's question is c) FSA (Flexible Spending Account), which is used for dependent care expenses. A 401(k) is a retirement savings plan with tax advantages, and an IRA is a similar individual retirement account.
Step-by-step explanation:
The correct answer to the question is c) FSA (Flexible Spending Account). A dependent care FSA is a pre-tax benefit account used to pay for eligible dependent care services such as preschool, summer day camp, before or after school programs, and child or elder care. A 401(k) is a type of defined contribution retirement savings plan offered by many employers. The IRA (Individual Retirement Account) is another type of retirement savings account that is set up by an individual rather than through an employer, offering tax advantages for retirement savings.
401(k)s are increasingly common as employers shift from defined benefit plans to these defined contribution plans, which offer tax deferral and portability. This means that employees can take their 401(k) with them if they change employers, and the contributions grow tax-deferred until withdrawal during retirement.