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Contributions to a Roth IRA can be withdrawn penalty-free to open a 529 plan. 529 plans allow contributions to grow tax-free and provide tax-free distributions for qualified education expenses.
A Roth IRA offers significant tax benefits “Roth IRA accounts have the same taxable benefits as a 529 account,” says Matt Boelter, senior director of financial planning at Edelman Financial ...
The 529-plan-to-Roth-IRA rules say that you have to have had the 529 account for at least 15 years, and you can only convert funds that have been in the 529 account for at least five years.
Starting in 2024, unused 529 funds can be rolled into a Roth IRA tax-free, thanks to the SECURE 2.0 Act, giving families more flexibility with college savings.
Here are the details on converting a 529 plan to a Roth IRA. ... Pros of converting a 529. Puts stranded 529 funds in a Roth IRA tax-free: This biggest advantage of a conversion is that you can ...
A 529 plan is a tax-advantaged way for parents to save for their children’s education expenses. ... The 529 plan must be open for at least 15 years before it can be rolled over into a Roth IRA ...
As of 2024, you may be allowed to roll over up to $35,000 in unused funds from your 529 plan into a Roth IRA account for the beneficiary — the idea being that these unused funds can help ...
Annual 529-to-Roth transfers are limited to the lesser of the annual Roth IRA contribution limit ($7,000 in 2024 for adults under 50) or the recipient's actual earnings during that year.
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