New 529 Rollovers to Roth IRAs
New 529 Rollovers to Roth IRAs as part of Congress’s $1.7 trillion federal spending package. 529 plan beneficiaries will now be able to roll over a portion of plan assets both tax-free and penalty-free to their Roth IRAs.
Conditions that Must be Met:
- This applies to rollovers taking place after December 31, 2023.
- Cumulatively, a beneficiary may roll over up to $35,000 over his/her lifetime.
- Any amount rolled over is subject to the annual Roth IRA contribution limits. For 2024, the limit is scheduled to be $6,500 plus a $1,000 catch-up for individuals aged 50+.
- Assets can’t be rolled over unless the 529 plan has existed for 15 years.
- Changing beneficiaries will restart the 15-year time period.
- Contributions or earnings on contributions made in the last 5 years are not eligible to be rolled over.
Have more questions? Contact Us
Missie Beach, CFP®, CDFA®
Senior Financial Advisor
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