1/13/2024 0 Comments Downloading IRA![]() However, more complex maneuvering could be more trouble than it's worth, as we'll see below.īefore anyone starts roping off $35,000 in their 529 accounts, it's important to understand the limitations on this type of rollover: The rules-at least the ones we know so far-could make rollovers an appealing possibility for leftover funds. "Funding a Roth isn't the primary selling point." ![]() ![]() "This provision offers another option for those wondering what to do with unused 529 assets," he says. This might come as a relief to anyone worried about having excess funds stuck in a 529 should the intended beneficiary not need them (say, if they opted not to attend college or chose a lower-cost school).īut could this provision prove to be something more? Could a savvy investor consider intentionally overfunding a 529 with an eye toward eventually building up tax-free Roth savings, either for themselves or members of their family?ĭon't count on this being the case, says Chris Kawashima, a senior research analyst at the Schwab Center for Financial Research. It works like this: Starting in 2024, you can roll unused 529 assets-up to a lifetime limit of $35,000-into the account beneficiary's Roth IRA, without incurring the usual 10% penalty for nonqualified withdrawals or generating any taxable income. And now it turns out you might be able to use leftover 529 funds to help them save for retirement as well.Īt least, that's the idea behind a new provision included in the SECURE 2.0 Act. Wealth and Investment Management Solutionsĥ29 accounts are an established way to help kids and other family members save for college.Meet the experts behind Schwab's investing insights.Environmental, Social and Governance (ESG) Investing.Bond Funds, Bond ETFs, and Preferred Securities. ![]() ![]() ADRs, Foreign Ordinaries & Canadian Stocks.Environmental, Social and Governance (ESG) ETFs.Environmental, Social and Governance (ESG) Mutual Funds.Benefits and Considerations of Mutual Funds. ![]()
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