00:00After Congress tweaked the rules covering 529 plans in 2022, people without kids are now able
00:06to put money into those accounts after hitting the annual limits for contributing to their
00:10retirement plans. So in a way, they treat the 529 as a backdoor for funding a Roth IRA.
00:16Sarah joins us along with Bloomberg Zijia Song. So Sarah, let's just back up a little bit. 529
00:20accounts are for you to put money away for your child or unborn child's college savings,
00:26or maybe even their high school savings if they're going to go to a private school.
00:30But if you are an avid saver, you could use it for something else as well.
00:34Yeah, I think what's really interesting about the 529 is kind of this misconception that it's
00:39actually for your children. Actually, anybody can have their own 529 account.
00:42I can open one right now.
00:43You can open up one for yourself. You can open up one for your children as well.
00:48You know, open one up for a niece or a nephew. And I think a lot of people are really
00:52discovering
00:53here that since Congress tweaked the rules, there's a new way that they can kind of use
00:58it as like a wealth building strategy. So we spoke with people who are either opening these 529
01:04accounts before they have children or before they even know they want them because they're
01:09using it as a way to maybe kind of put extra funds into a Roth IRA if they go unused.
01:14What are the limitations to using a 529 account to fund retirement?
01:18It's a very complicated process. And a lot of the financial advisors that we spoke with say
01:22that it should probably kind of come in at the end, you know, after you've maxed out
01:26these other accounts. But you have to have the funds in your 529 plan for five years.
01:31You can only move up to $35,000 over a lifetime. And you also have to hit the Roth IRA
01:38annual
01:39contribution limits, which this year at $7,500. So you have to do it in increments.
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