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New legislation allows transfer of unused 529 college savings to Roth IRAs

  • / Updated:
  • Staff Report 

Starting in 2024, individuals will have the opportunity to transfer unused funds from their 529 college savings accounts into Roth Individual Retirement Accounts (IRAs) without incurring taxes or penalties.


The 529 accounts, established to assist families in saving for college with tax benefits, are set to gain this novel flexibility, potentially bolstering retirement savings for many.

Key features of the 529-to-Roth rollover provision include:

  • The law takes effect in 2024.
  • A 529 account must have been operational for a minimum of 15 years.
  • There’s a lifetime transfer cap of $35,000 for each beneficiary.
  • The beneficiary’s name on the Roth IRA must match that of the 529 plan.
  • Contributions added to the 529 within the past five years are not eligible for transfer.

Limits on the transfers specify a maximum of $6,500 per annum, not exceeding a total of $35,000. This amendment is an integral component of the SECURE 2.0 Act, ratified by Congress late in 2022, which introduced major changes to the U.S. retirement system. MMB+Co, offering insights on this change, operates in multiple New York locations, including Rochester and Elmira.



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