Very Important: these legislative changes affect all our children and grandchildren!  If you are a parent or grandparent, you will want to know this information that begins in 2024.

In this video, we discuss how to save money for your children and grandchildren’s education through 529 College savings plans. We address concerns about what happens if the child doesn’t use the funds, and we provide three options:

Change the Beneficiary: You can change the beneficiary of the 529 account to another eligible family member, which includes a wide range of relatives.

Withdraw the Funds: You can withdraw the funds, but this would be considered a non-qualified distribution, subjecting you to income tax and a 10% federal penalty.

New Option – 529 to Roth IRA Conversion: The main focus of our video is the introduction of a new option. Starting in 2024, you’ll be able to convert 529 savings to Roth IRAs. This conversion has a lifetime limit of $35,000 and is tax and penalty-free. This new provision is part of the Secure 2.0 Act, passed in 2022.

There are also other changes in the Secure 2.0 Act, such as increased contribution amounts for older workers in qualified accounts and an increase in the age at which required minimum distributions (RMDs) must start to 73.

If you have any questions, please reach out and let us know!


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