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529 Plans Changes 2024

In 2024, there will be significant changes made to 529 education savings plans in the United States. 529 plans are tax-advantaged investment accounts designed to encourage saving for future education costs. The changes coming in 2024 aim to make these accounts more flexible and beneficial for families.

529 Plan Changes in 2024 - Overview

The main changes are:

  • Expanded eligible expenses - Up to $10,000 per year can be used for K-12 tuition in addition to college costs
  • Increased contribution limits - Individuals can contribute up to $15,000 per year without gift tax
  • Introduction of tax credit for 529 contributions
  • Ability to transfer unused funds into a Roth IRA after 15 years

These updates provide more options for using 529 money and incentives to save more. The changes were instituted through the SECURE 2.0 Act passed in December 2022.

Important Details

529 Plan Changes Details
Applicable For US citizens
Investment Duration 15 years
Investment Purpose Higher education costs
Introduced December 2022
Drawbacks Limitations on investment options, fees

529 Plan Calculator

A 529 plan calculator for 2024 can help determine the amount needed to save for future education expenses. Inputs include current age of beneficiary, anticipated costs, expected investment growth rate, and planned monthly contributions. The calculator outputs an estimate of the total savings goal and monthly amount needed to achieve it.

529 Plan Investment Options

529 plans offer various investment options, typically a range of stock and bond mutual funds. There is an account maintenance fee charged annually by the state, typically $0-$25. If enlisting an advisor, up to 5% or more of assets may be charged for their services. The underlying investments also carry fees and expenses.

Using 529 Funds for Student Loans

Starting in 2024, employer retirement plan matches can be applied to employee student loan repayments, treating them as elective deferrals. This gives employees with student debt another option to receive employer retirement contributions even if not able to contribute directly from their paycheck.

529 Rollover to Roth IRA

The SECURE 2.0 Act allows rollover of up to $35,000 unused 529 funds to a Roth IRA after 15 years without penalties. This provides an option for 529 savers to repurpose extra funds to retirement savings later tax-free.

529 Retirement Booster Benefits
Flexibility Unused funds can be directed to retirement instead of just education
Lower Anxiety Savings plan can evolve along with changing beneficiary needs

529 Plan Drawbacks

While the 2024 changes provide new benefits, some limitations remain with 529s:

  • Restricted investment choices compared to other accounts
  • Account fees can eat into earnings
  • Large contributions may incur gift taxes
  • 15 year commitment to use Roth rollover feature
  • Tax benefits aimed more at lower income savers

529 Plan Benefits

The key features of 529 education savings plans include:

  • Up to $35,000 unused funds can be rolled over to a Roth IRA after 15 years
  • Money transferred to Roth grows tax-free for retirement
  • Provides flexibility to redirect excess funds to beneficiary's retirement
  • Promotes long-term financial security


The 529 plan changes coming in 2024 seek to expand the usability and flexibility of these education savings accounts. The increased contribution limits, new tax credits, and Roth rollover option provide more incentives for families to utilize 529s. While some restrictions remain in place, the updates create more possibilities for savers to redirect these funds if needed to other uses like retirement savings in the future.


Q1: What is a 529 education savings plan?

A1: A 529 plan is a tax-advantaged investment account in the US designed specifically for saving money to cover future education expenses. Funds can be used for college or other post-secondary training.

Q2: How do the 2024 changes impact 529 plans?

A2: The changes expand the use of funds to K-12 tuition, increase contribution limits, allow a new tax credit, and enable roll over to a Roth IRA after 15 years.

Q3: What are the main benefits of 529 plans?

A3: 529 plans offer tax-deferred growth, flexible investment options, high contribution limits, and tax-free withdrawals for qualified education expenses.

Q4: What are the drawbacks of 529 plans?

A4: Drawbacks include limited investment choices, account fees, implications for financial aid, and restrictions on use of funds to non-education expenses.

Q5: How can a 529 plan help pay for college?

A5: 529 funds can be used tax-free to pay for tuition, room and board, books, computers, and other college expenses at eligible institutions.

Q6: Can 529 funds be used for non-college expenses?

A6: Up to $10,000 per year can now be used for K-12 tuition. Unused funds over $35,000 can be rolled over to a Roth IRA after 15 years.


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