Roth IRA vs 529

[cycloneG]

https://www.cnbc.com/2023/09/15/529-college-savings-plans-had-a-major-sticking-point-until-now.html

"Starting in 2024, savers can roll unused money from 529 plans over to Roth individual retirement accounts free of income tax or tax penalties. Among other limitations, the 529 account must have been open for 15 years and account holders can’t roll over contributions made in the last five years. Rollovers are subject to the annual Roth IRA contribution limit, and there’s a $35,000 lifetime cap on 529-to-Roth transfers."

 

[KnappShack]

https://www.cnbc.com/2023/09/15/529-college-savings-plans-had-a-major-sticking-point-until-now.html

"Starting in 2024, savers can roll unused money from 529 plans over to Roth individual retirement accounts free of income tax or tax penalties. Among other limitations, the 529 account must have been open for 15 years and account holders can’t roll over contributions made in the last five years. Rollovers are subject to the annual Roth IRA contribution limit, and there’s a $35,000 lifetime cap on 529-to-Roth transfers."

So the funds could be rolled into a Roth in the kid's name?

That still seems like a limitation I can't get around

 

[CycloneDaddy]

We do the Iowa 529 because I like that it saves me around $800 a year in Iowa taxes.

If you see a boat on Saylorville with the name “529” then either my kids got full rides or didnt attend school.

Update - Oldest started ISU this year and got $0 in scholarship money so boat has to wait sadly.

 

[Cyched]

Update - Oldest started ISU this year and got $0 in scholarship money so boat has to wait sadly.

No it doesn’t

 

[TrailCy]

We have 529 for each child and this year I set up a Roth for each one as well. Hpoefully best of both worlds.

 

[clone52]

If your children won't be using the funds for 13-15 years, I'm assuming they are too young to be earning income which precludes them (or anyone else) from contributing to a Roth IRA in their name. We're doing 529 for our kids and plan to open a Roth for them once they start earning income from part time jobs.

You can start a Roth IRA in your own name and convert it to you kids when the do start earning income. I don't know exactly how

 

[reignofthetiger]

We do the Iowa 529 because I like that it saves me around $800 a year in Iowa taxes.

If you see a boat on Saylorville with the name “529” then either my kids got full rides or didnt attend school.

You all should just move to Indiana for our 529 plan - we save up to $1500 per kid on Indiana taxes.

 

[CycloneDaddy]

You all should just move to Indiana for our 529 plan - we save up to $1500 per kid on Indiana taxes.

Do I have to live in Gary?

 

[clonechemist]

I’m a regular brokerage guy for my kid’s college/whatever fund. E-trade. Easy af.

Same.

Where we are, the tax benefits don’t seem to outweigh the flexibility of a brokerage account, which we can easily withdraw for any use we choose.

 

[cyfan92]

You can start a Roth IRA in your own name and convert it to you kids when the do start earning income. I don't know exactly how

I believe you just have to change the beneficiary.

We started a 529 for both our children prior to their birth by opening the accounts in my wife and I's names. Then, once they have a SSN, we updated the beneficiary to their names.