529 Plans receive a big change recently, see how it can now help the beneficiary pay for college and save for retirement.
We’ve been saving into a 529 plan quite aggressively since the birth of our first child over ten years ago. As we had more kids, we continued to make these contributions because you can always change the beneficiary of a 529 plan without penalty.
If our first child didn’t end up needing it, our backup plan was to change the beneficiary to our second. With how much college costs these days, and will likely increase in the next decade, chances are our 529 plans were going to be emptied.
If you don’t have four kids, the idea of putting too much into a 529 plan is a big risk. A good risk but a big one nonetheless.
But when the SECURE Act 2.0 was signed into law, it changed everything. There’s now no risk to funding a 529 plan.529 Plans Can Be Rolled into Roth IRAs
The big headline change was that, subject to state laws, you can now roll over up to $35,000 of unused 529 plan funds into a Roth IRA for the beneficiary.
