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How will SECURE Act 2.0 affect 529 plans?

Starting in January 2024, SECURE 2.0 will allow funds from an established 529 account to be transferred tax-free to a Roth IRA for the same beneficiary. This will allow educational funds to serve as a starting point for a beneficiary's Roth IRA savings. There are certain limitations:
  • The 529 account has to have been open for at least 15 years.
  • The beneficiary of both the 529 account and the Roth IRA must be same person.
  • The amount of the rollover will be limited:
    • Annual rollovers will be subject to yearly IRA contribution limits, minus any other IRA contributions that have already been made.
    • There will be a lifetime aggregate rollover limit of $35,000 per beneficiary.
    • Rollovers may not include contributions (or earnings) made in the last 5 years.
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