Ask Terry Questions 529 to Roth IRA

529 to Roth IRA

By Terry Savage on March 12, 2023 | College Savings / Student Loans

Hi Terry, I love your columns and interviews. My son is turning 25 in July and it looks like he is not going to use his 529 funds before 26 years of age. You have mentioned the new Secure 2.0 that lets you move unused 529 funds to IRAs. I think he has at least $35k in his 529 and it has been there for years. What could he expect to end up with at age 65 if the 529 is converted to an IRA at 26? Thanks Terry!

Terry Says

The money must have been in the account for 15 years. If he invested it in the S&P 500 index fund, the historic AVERAGE annual return with dividends reinvested is 10%.
And then there’s Plan B You can leave the account open and earning tax-deferred to use for a grandchild, if one comes along!!



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