HOW DOES THE SECURE 2.0 ACT OF 2022 IMPACT 529 PLANS, AND WHAT ARE SOME OPPORTUNITIES IT PROVIDES? Get insights from Matthew Rivera, Wealth Advisor
Q: What is a 529 plan?
A: A 529 plan is a savings plan designed to help families save for education expenses. The funds in a 529 plan can be used for qualified education expenses such as tuition, room and board, and textbooks.
Q: What is the new rollover option for 529 plans?
A: Beginning in January 2024, 529 account owners can roll over funds from a 529 plan into a Roth IRA for the benefit of the 529 plan beneficiary.
Q: How does the rollover work?
A: The rollover is treated as a contribution towards the annual Roth IRA contribution limit and is subject to the $6,500 annual limit. The Roth IRA must be in the same name as the 529 plan beneficiary.
Q: Are there any eligibility requirements for the rollover?
A: Yes, the 529 plan must have been in existence for at least 15 years prior to initiating the rollover and any 529 contributions made within the last 5 years of the rollover initiation date are ineligible.
Q: How much can be rolled over from a 529 plan to a Roth IRA?
A: Beneficiaries of 529 accounts would be permitted to rollover up to $35,000 over the course of their lifetime from any 529 account in their name to their Roth IRA.
About Matthew Rivera: He became a member of the Vance Wealth team in November of last year, bringing with him extensive experience in retirement planning and an investment focused approach to help clients plan for a fulfilling retirement. If you’d like to learn more about Matthew’s background and expertise, you can visit his profile on the Vance Wealth, click here.