People Without Kids Now Utilize 529 Accounts

Summary

Bloomberg's Sarah Foster explains how 2022 changes to 529 plan rules let people without children use the accounts as a backdoor to fund Roth IRAs. She details the restrictions: five-year holding period, $35,000 lifetime rollover cap, and annual Roth contribution limits. Advisors suggest using this only after maxing other retirement accounts.

• 2022 Congress changes expanded 529 plan use beyond college savings for children.
• Individuals can open 529s for themselves, children, nieces, or nephews.
• Unused 529 funds can be moved to a Roth IRA under certain conditions.
• Key limits include a five-year holding period and a $35,000 lifetime cap.
• The strategy is recommended only after maxing other retirement accounts.