New rule lets families move up to $35,000 from 529 plans to Roth IRAs

economictimes.indiatimes.com

A new rule allows up to $35,000 from 529 college savings plans to be moved into Roth IRAs. This change, effective since 2024, offers flexibility for unused education funds. The SECURE 2.0 Act permits tax-free rollovers if the 529 plan is at least 15 years old and recent contributions are excluded. The beneficiary must also have earned income. This provision aims to prevent penalties on unused education savings, allowing families to redirect funds toward retirement. Approximately 16.8 million 529 accounts were active as of June 2024.


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New rule lets families move up to $35,000 from 529 plans to Roth IRAs | News Minimalist