Series 6 Practice Exam 2025 – Complete Exam Prep Resource

Contributions to a 529 Plan can indeed be made by anyone, regardless of their income level, which makes this statement true. This feature of 529 Plans allows for greater flexibility and accessibility for saving for education. Individuals who wish to support a beneficiary’s education—be it a child, grandchild, or even a friend—are not restricted by their personal income when making contributions.

This inclusivity of contributors is one of the appealing aspects of 529 Plans, as it fosters a communal approach to saving for education expenses by allowing various family members and friends to contribute without financial qualifications.

Other statements in the question contain limitations or requirements that do not apply to 529 Plans. Contributions are not inherently subject to estate taxes as there are strategies like the annual gift tax exclusion that can be applied. Funds in a 529 Plan do not need to be used within a specific timeframe such as one year; instead, they can remain invested for longer periods, which provides an opportunity for growth. Lastly, while the primary focus of 529 funds is to cover education expenses, their use is not limited solely to college education. They can also be used for K-12 expenses and other qualified educational costs, enhancing the flexibility of the plan for various educational needs.