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.