Can I roll my 529 into a Roth IRA?

The SECURE 2.0 Act created a new 529-to-Roth option, but the fine print matters:

The Basic Rules (Starting 2024) - Lifetime maximum rollover: $35,000 per beneficiary - Account must be at least 15 years old - Annual limit: Same as Roth IRA contribution limit ($7,000 in 2024) - Beneficiary must have earned income - Last 5 years of contributions can't be rolled

Why It's Less Helpful Than It Sounds

The 15-Year Requirement If you opened a 529 when your child was born and they're now 18, you qualify. But if you opened it at age 5, you have to wait until they're 20+. Many families won't meet this requirement.

The Annual Limit Problem At $7,000/year, rolling over $35,000 takes 5 years minimum. Your 18-year-old needs earned income for 5 years to complete the rollover.

The $35,000 Cap If you have $100,000 in your 529, you can only move $35,000. The rest remains restricted to education or subject to penalties.

Contribution Limit Competition Each year's rollover counts against the Roth contribution limit. If your child rolls over $7,000, they can't make any other Roth contributions that year.

The Math Doesn't Work - Most overfunded 529s have more than $35,000 "extra" - The restrictions make execution complicated - You're still stuck with the excess - It's a band-aid, not a solution

Better Approach Start with a Child Life Portfolio that doesn't need an escape hatch. Flexible from day one, no restrictions ever.