Updated

Updated · WMTV · May 29

Evers Declares May 29 Wisconsin 529 Savings Day, Offering $50 Bonus for New Edvest Accounts

Updated

Updated · WMTV · May 29

Evers Declares May 29 Wisconsin 529 Savings Day, Offering $50 Bonus for New Edvest Accounts

Q: A new rule allows rolling 529 funds into a Roth IRA. Does this flexibility eliminate all risks of over-saving for college?

No. The new 529-to-Roth IRA rollover rule reduces the risk of over-saving for college, but it does not remove it. The biggest limit is size: only up to $35,000 can be rolled over over a beneficiary’s lifetime. If a family has much more left in a 529 account, the excess still has to be used for qualified education costs, shifted to another eligible family member, saved for future schooling, or withdrawn with taxes and a 10% federal penalty on earnings. The rollover also works slowly and only under strict conditions. The 529 account must generally have been open at least 15 years, and money contributed in the last five years is not eligible. The rollover is also capped by the annual Roth IRA contribution limit, so it usually must be spread over several years. And the beneficiary must have earned income at least equal to the amount rolled over that year. There can also be state tax complications. Federally, the rollover is tax- and penalty-free if the rules are met. But some states may not treat the rollover as a qualified 529 use, which could trigger state income tax or recapture of prior state tax breaks. That said, the rule is still a meaningful safety valve. It adds flexibility on top of other 529 options, including changing the beneficiary, using funds for graduate school, technical training, apprenticeships, or limited student loan repayment. For Wisconsin savers considering Edvest or Tomorrow’s Scholar, it makes over-saving less risky, not risk-free.

1 articles · Updated · WMTV · May 29

Wisconsin designated May 29 as 529 College Savings Day, with Gov. Tony Evers issuing the proclamation to promote college planning.
A $50 bonus deposit is available to people who open a new Edvest 529 account by June 5, the state Department of Financial Institutions said.
Wisconsin’s 529 program includes two plans: direct-sold Edvest 529 and Tomorrow’s Scholar, which is offered through financial advisors and fee-only planners.
529 savings can be used at accredited colleges, universities, technical and professional schools in the U.S. and many abroad, with qualified education withdrawals exempt from state and federal taxes.

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WMTV26d ago

Gov. Evers Proclaims May 29 '529 College Savings Day' in Wisconsin

Beyond the $50 bonus, how do Wisconsin's 529 plan fees truly compare nationally, and what is the real long-term cost?

The 529-to-Roth IRA rollover is federally tax-free. But could it trigger a surprise state tax bill for Wisconsin savers?

A new rule allows rolling 529 funds into a Roth IRA. Does this flexibility eliminate all risks of over-saving for college?

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1 total

WMTV26d ago

Gov. Evers Proclaims May 29 '529 College Savings Day' in Wisconsin

Evers Declares May 29 Wisconsin 529 Savings Day, Offering $50 Bonus for New Edvest Accounts

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