529 pa

[jad56061]

If I switch beneficiaries from my 529, does that restart the clock for 529 for waiting15 years to transfer to a roth ira or is it null and void for roth ira?

[TeriH]

Good question!

I actually did this yesterday.  And I most assuredly have switched from my sons names to mine as the account holder and beneficiary.  They stated, it was unclear, but at present they were following the guidance and made the distribution.  All other conditions were satisfied.

[jad56061]

So I have a question. If I have 150k in the 529 account and I keep changing beneficiaries to family members to donate to their 529, is that allowed? Does the clock reset every 15 years? Id love to hear your thoughts since you did it! This is interesting.

[TeriH]

well the kicker is you can only get out $35k , at present.  So, if you've overachieved and have an excess of $150k you are going to be severely limited to just $35k.  Unless, ... you can somehow split the $150k between 5 accounts, and then wait the 15 years. 

I'm not seeing another way around that.

[jad56061]

Hey its worth thinking about. Thank you!

[TeriH]

and i have!  

have you explored HSA's as a retirement saving vehicle?  If you have that option, I like it better.   It's triple tax advantaged, in that it goes in tax free, comes out tax free and grows tax free.  Best of all worlds.

[jad56061]

Yep! I have actually done that. My hierarchy of saving on taxes is maxing out Roth 401k since Im 32 and I will be in a higher tax bracket later, max out Roth IRA, max out hsa, and next is helping with college.  Either way, doing that I can 🙂 Good news is with the 529, I am not looking to access the funds anytime soon and I am trying to help with education either for my future kids or my nephew. Spreading the wealth.