Comments for The College Investor

Comment on 529 Plan To Roth IRA Rollover Rules: What To Know by Mark Kantrowitz

Mark Kantrowitz — Sun, 28 Jul 2024 10:53:42 +0000

In reply to Chelsea.

529 plan rollover contributions are subject to the annual IRA contribution limit, which is based on earned income, and subtracted from the limit.

However, they are not subject to any AGI limitations. The 529 plan to Roth IRA rollover provisions appear in section 126 of the Consolidated Appropriations Act of 2023. In particular, paragraph 126(b)(2)(B), WAIVER OF ROTH IRA INCOME LIMITATION, exempts the rollover from the limits based on AGI that appear in 26 USC 408A(c)(3).

So, the conflicting information may be due to one referring to earned income limitations and the other referring to AGI limitations. As such, there is no conflict.

Comment on 529 Plan To Roth IRA Rollover Rules: What To Know by Phil

Phil — Sun, 28 Jul 2024 03:42:27 +0000

In reply to Phil.

And here’s another reliable source saying the same thing, that “the beneficiary must have earned income equal to at least as much as the amount transferred in any year.” SavingForCollege, https://www.savingforcollege.com/article/roll-over-529-plan-funds-to-a-roth-ira

Comment on 529 Plan To Roth IRA Rollover Rules: What To Know by Phil

Phil — Sun, 28 Jul 2024 03:28:28 +0000

In reply to Chelsea.

Hi Chelsea, I have a reliable source (Journal of Accountancy, https://www.journalofaccountancy.com/news/2023/jul/the-new-529-rollover-roth-ira.html) which states that even though the upper income limits don’t apply (i.e., you can do a 529-to-Roth rollover even if income is over the applicable threshold), the “beneficiary must have earned income, and the amount that can be rolled over is the lesser of earned income or the IRA contribution limit. Therefore, if the beneficiary is not working, no rollover is available because there is no earned income.“

Comment on 529 Plan To Roth IRA Rollover Rules: What To Know by Chelsea

Chelsea — Fri, 26 Jul 2024 20:22:16 +0000

Hi there, we’d like to move some funds from our child’s 529 to a Roth for her. We meet all qualifications (15 years, 5 years, etc). I have heard conflicting statements that the income limitations have been removed meaning that there is no longer a requirement to earn the amount you’d like to invest in the Roth. She’s not yet working in her field, so hasn’t earned the $7,000 taxable income amount that we’d like to transfer from her 529 to a Roth this year. Thoughts on whether this is allowable or not? Thank you!

Comment on Comparing The Most Popular Solo 401k Options by Yuma

Yuma — Thu, 25 Jul 2024 16:58:46 +0000

In reply to Robert Farrington.

The annual $20 account service fee is usually charged for each mutual fund account with a balance below $10,000, although it can be waived for the following circumstances: Subscribe to electronic delivery of statements and confirmations; maintain an individual combined balance of $50,000 or more for all T. Rowe Price accounts (including mutual funds, Brokerage, and Small Business Retirement Plans); or qualify for the T. Rowe Price Summit Program.

You’re limited to only T. Rowe Price’s +150 no-load mutual funds – which some are decent. I’m investing in a couple of their stock funds and their target date Retirement Blend fund, which is cheaper than their regular target date fund.