Friends,
As we are close to starting a new school year and the continuation of college studies for some, we wanted to share the latest ideas pertaining to 529 college savings plans. Developments that have occurred in recent years have loosened the rules on these plans and allowed for greater flexibility in the usage of the funds. These changes may assuage some concerns you might have pertaining to overfunding a 529 plan.
Four considerations for 529 plans and recent developments:
- SECURE ACT 2.0 Roth IRA Changes:
- As of January 1, 2024, leftover 529 funds (up to $35,000) can be rolled into a Roth IRA for the beneficiary given a few stipulations.
- Non-Collegiate Uses :
- As of 2018, those funding private school education are allowed to withdraw up to $10,000 a year to pay for private education tuition at a K-12 school.
- Study Abroad:
- 529 funds may also be used for qualified educational expenses associated with studying abroad for students looking to travel overseas while enhancing their education.
- New Beneficiary:
- If there are funds leftover, the beneficiary can be changed to a person related to the owner (this definition is extremely broad) or could be held until grandchildren need the funds for college.
To read more in-depth about 529 savings plans see the articles below or reach out to us!
Matt and Andrew
Sources:
What to Do With a 529 Plan If Your Kid Doesn't Go to College - Consumer Reports