Apr 11 2024 18 mins 16
The SECURE 2.0 Act opened new doors for the use of 529 plan funds. Kelley Long discusses the impact of the changes on strategies available to clients using 529 plans. Not only does Kelley review the rules of rolling 529 plan funds to Roth IRAs, but also takes a step further to address the numerous related questions she has gotten on this strategy and other creative ways to draw down 529 plan funds. In this episode of the PFP Section podcast, Kelley will provide the information you need to discuss how 529 plans can fit into your clients’ financial plans. The conversation includes the following topics:
- How to handle beneficiary changes.
- How to equalize the distributions from excess funds in 529 plans.
- How to evaluate the 15-year measurement when transferring 529 funds to Roth IRAs.
- How does a transfer of funds from one beneficiary to another impact the 5-year rule?
- What is a backdoor 529 to Roth transfer?
- Can a mature client contribute 529 plans with the intent to roll the funds to a Roth IRA?
- What are the penalties for 529 non-qualified withdrawals?
- What are some other ways to draw down excess funds in a 529 plan?
- How taking out a student loan can be a strategy
Access resources related to this podcast: Note: If you’re using a podcast app that does not hyperlink to the resources, visit Libsyn (PFP) to access show notes with direct links.
- Read Kelley’s article: Saving for college: The new 529-to-Roth IRA transfer rule
- Related podcast: How SECURE 2.0 impacts clients we see in our practice
- Use the related Education planning resource guide or Roth changes from SECURE 2.0 visual.
- Learn more about the pathways for getting educated and attaining your CPA/PFS.
This episode is brought to you by the AICPA’s Personal Financial Planning Section, the premier provider of information, tools, advocacy, and guidance for professionals who specialize in providing tax, estate, retirement, risk management and investment planning advice. Also, by the CPA/PFS credential program, which allows CPAs to demonstrate competence and confidence in providing these services to their clients. Visit us online to join our community, gain access to valuable member-only benefits or learn about our PFP certificate program.
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