What is 529 plan to Roth IRA rollover?
In short
Since 2024, the beneficiary of a section 529 plan open for at least 15 years can roll up to $35,000 over their lifetime into their own Roth individual retirement account (IRA), tax- and penalty-free.
Key takeaways
- Each year's rollover counts against the annual Roth contribution limit, and the beneficiary needs earned income.
- Contributions made in the last 5 years, and their earnings, can't be rolled over.
- The Roth income limits don't apply to these rollovers.
Where it's tested
TCP: Personal Financial Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Earnings in a Section 529 qualified tuition program are: