Richard Chew – Financial Lifestyle Expert and Principal of 1st Capital Wealth Management Group
- Amounts/Basic Guidelines:
- Contributed/Lifetime Rollover Max = $35,000.
- Waiting Periods = 15 Years in place/open.
- $6,500 is the maximum annual (2023) of subsequent after-tax contributions.
- Contribution /Earnings in the final 5 Years cannot be rolled to the Roth IRA.
- Other Guidelines/Upsides:
- No age or income limits for setting up a 529.
- No taxes on withdrawals used for qualified education expenses.
- Beneficiaries can be switched and some of the funds can be used to pay off college loans.
- More than 30 states offer state income tax deductions/credits.
- $17,000 Annual Contribution Limits 2023 – Roth is $6,500
- Can be Max-Funded in 1 year.
Overall Considerations:
- Great tool to fund education but start the year your child is born.
- Grandparents can contribute for their grandchildren etc.
- Set up needs to be reviewed based on state guidelines.
- You can have both a 529 and a Roth in place.
- Use the 529 funds first then tap the Roth for any leftover expenses.
