The issue with 529 college savings plans has always been not being able to remove excess funds without incurring a penalty. The SECURE 2.0 Act, which became law in December 2022, changes the 529 plan rules to allow rollovers of some funds from these college savings accounts into a Roth IRA. It could allow transfers to take place without tax and penalty fees. But there are certain criteria that need to be met. The 529 account must have been open for at least 15 years. There is a lifetime rollover limit of $35,000. In addition, the rules indicate that funds contributed to the 529 account within the five years preceding the rollover will not be eligible to roll over. Under the SECURE 2.0 Act, the new rules will become effective on Jan. 1, 2024. For more information go to yoursafemoneyshow.com.
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