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Finra Exam SIE Topic 4 Question 4 Discussion

Actual exam question for Finra's SIE exam
Question #: 4
Topic #: 4
[All SIE Questions]

How long are unused funds permitted to remain in a Coverdell education savings account?

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Suggested Answer: B

Coverdell Education Savings Accounts (ESAs) require that all funds be distributed by the time the beneficiary reaches 30 years old. If the funds are not used for qualified educational expenses, they may be subject to taxes and penalties.

B is correct because funds must be distributed by age 30 unless transferred to another eligible family member.

A is incorrect as age 21 is not relevant for Coverdell ESAs.

C is incorrect because age 59 applies to retirement accounts like IRAs.

D is incorrect because there is a distribution deadline for Coverdell accounts.


by Brynn at Feb 11, 2025, 08:30 AM

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Yuonne
1 months ago
I'm not sure, but I think it's D too. It makes sense to allow funds to remain in the account indefinitely.
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Apolonia
1 months ago
I agree with Kerrie, there is no age limit for funds to remain in the account.
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Elizabeth
2 months ago
Haha, 59 years old? Who would ever let their kid's education savings sit that long? C is just silly.
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Shenika
2 months ago
This is a classic trick question. The answer is obviously A - you have to use the funds by 21, no exceptions!
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Dorcas
19 days ago
I'm pretty sure it's A, you have to use the funds by age 21.
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Sarah
20 days ago
Actually, it's C, all funds must be distributed by age 59.
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Lacresha
25 days ago
No, I believe the correct answer is D, there is no age limit for the funds.
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Tomoko
1 months ago
I think the answer is A, all funds must be distributed by age 21.
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Kerrie
2 months ago
I think the answer is D.
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Eulah
2 months ago
D sounds like the right answer to me. There's no age limit on the funds, you can keep them in the account as long as you need them for education.
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Kimberely
2 months ago
Hmm, I was pretty sure it was 21 years old. This is tricky, I better double-check that.
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Chana
2 months ago
I think the answer is B. The beneficiary has until 30 years old to use the funds, right?
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Melina
8 days ago
Good to know, thanks for the clarification.
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Arminda
13 days ago
Yes, it's important to distribute the funds before the beneficiary turns 21.
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Ricki
24 days ago
Oh, I see. I thought there was more time to use the funds.
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Ethan
1 months ago
No, the correct answer is A) All funds must be distributed when the beneficiary's age reaches 21 years old.
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Micah
1 months ago
B) All funds must be distributed when the beneficiary's age reaches 30 years old.
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Jame
2 months ago
A) All funds must be distributed when the beneficiary's age reaches 21 years old.
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