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 $7,000 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 the beneficiary 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.

Disclosures: Vance Wealth, Inc is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Vance Wealth and its representatives are properly licensed or exempt from licensure. The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
Investors should carefully consider the investment objectives, risks, charges and expenses associated with 529 college savings plans before investing. More information about 529 college savings plans is available in the issuer’s officially statement and should be read carefully before investing.