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Test Your 529 Knowledge Part I

Posted: 2013-12-19

by Joseph Hurley

Test Your 529 Knowledge Part I

Financial Professional Content

A big part of our mission here at is educating financial professionals on the ins and outs of 529 plans so that you can better serve your existing clients and more effectively market your services to potential new clients.

So how well do you think you know your 529 plans? Take this three-question test—the first of an occasional series—and find out. Pat yourself on the back if you answer all three questions correctly.

  1. Regarding 529 plans, what is the largest amount that an individual can contribute for any one beneficiary this year?
    1. $14,000
    2. Somewhere between $200,000 and $500,000 (varies by state)
    3. Over $5 million
  2. You can't really tell how your 529 savings account is performing until the quarterly statements come out because the program management fees have to be loaded in by the plan record-keeper. True or false?
    1. True
    2. False
  3. Why is it usually better in a family with two children to establish a separate 529 account for each of them? (Choose all that apply)
    1. Because the parents will not be able to change the beneficiary once the older child becomes an adult at age 18 or 21.
    2. Because the parents will be able to contribute more funds without exceeding the gift-tax annual exclusion.
    3. Separate accounts will help with their federal financial aid eligibility.
    4. Separate accounts promote family harmony and avoid confusion.
    5. The 529 investments can be more easily tailored to the age of the beneficiary.
    6. 529 plans will waive the annual account management fee for the second account.

Go to the next page for the answers.

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