Eligible only for the 529 beneficiary The Roth IRA must be in the name of the person who is listed as the beneficiary on the 529 plan (usually the child).
15-year minimum rule The 529 plan must have been open and funded for at least 15 years before a rollover is allowed.
Annual contribution limits apply You can only roll over up to the annual Roth IRA contribution limit each year (e.g., $7,000 in 2024 if under 50).
Lifetime maximum The total amount that can ever be rolled over is capped at $35,000 per beneficiary.
No double-counting contributions Contributions (and earnings on those contributions) made within the last 5 years are not eligible for rollover.
No income limit restriction Unlike normal Roth IRA contributions, these rollovers are not subject to income phase-out rules, meaning high earners can still use them.
Example
You set up a 529 plan for your child in 2005.
In 2024, the plan has $50,000 left unused.
You could roll over $7,000 in 2024 (the Roth contribution limit), another $7,000 in 2025, and so on, until a lifetime total of $35,000 is rolled into the Roth IRA.
The remaining funds (beyond $35,000) would still be subject to normal 529 withdrawal rules (qualified use, beneficiary change, or taxes + 10% penalty).
Why This Matters
Provides a safety net if the 529 isn’t used for education.
Helps the beneficiary kickstart retirement savings early.
Avoids tax penalties that otherwise apply to non-qualified withdrawals.
