Ask Terry Questions Secure 2.0 Act. for 529 Plan IRA Deeposit

Secure 2.0 Act. for 529 Plan IRA Deeposit

By Terry Savage on January 03, 2024 | College Savings / Student Loans

My understanding is that I can deposit funds in my daughter’s 529 Plan into a Roth IRA starting this year as long as the 529 Plan Account has been open for at least 5 years. If true, can new funds deposited in the 529 Plan this year be deposited into the IRA this year as well?

Terry Says

Wait — how old is your daughter? This is for “unused” funds (which could also have been used for another child in the family).
Here are the rules:
Rollovers from 529 plans to Roth IRAs are permitted if certain criteria are met:
529 plan beneficiaries can roll over up to $35,000 to a Roth IRA over their lifetime.
Rollovers are subject to Roth IRA annual contribution limits.
The 529 account must be more than 15 years old.
No contributions or earnings on contributions from the last five years can be transferred.
529 to Roth IRA rollovers can be made beginning in 2024.

Most importantly, the beneficiary must have enough “earned income,” or wages from a job, to match each year’s conversion, similar to regular Roth IRA contributions.



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