529 Plan Balance That Won’t Be Used — Consider a Roth Ira Rollover Option

Starting in 2024, a 529 plan that is at least 15 years old can have up to $35,000 of the balance rolled over to a Roth IRA for the beneficiary. The transfer must be a trustee-to-trustee rollover to the Roth IRA (direct from the 529 plan to the IRA).

The annual transfer can’t exceed the maximum IRA contribution allowed, less any contribution made by the beneficiary him / her self that year.

This option is useful for the situation where a student gets financial aid and does not use all 529 plan assets or where there is no other family member who could be named using a rollover of the plan assets.