NASHVILLE, Tenn. (WTVF) — If you haven't already started saving for college for your kids yet, there is a new reason to start a 529 savings plan for your child's education.
Until now, funds in a 529 had to be used for education expenses, but that's changing.
Starting this year, families can roll unused money from a 529 into a Roth IRA, or individual retirement account, tax free after 15 years.
That means if a child doesn't put that savings to use, you have a little extra for retirement.
Until now, that was one of the biggest issues parents had with creating one of these accounts, because if their child didn't use all the money or say they got a full scholarship the money would go unused.
Now, there is a limit.
Parents can only roll over up to $35,000 into a Roth IRA for themselves, or their child.
Experts say if someone in their mid-20s put $35,000 in a Roth IRA and left it alone, that could turn into close to one million dollars in about 40 years.
Not bad.
Our viewers are the best! When Hannah McDonald highlighted the plight of Serenity Sumler, so many of you immediately stepped up. Serenity stopped to help a driver after spotting a wreck and was hit by another car, resulting in terrible injuries. Without the funds to pay for physical therapy, she was at a loss. Because of the kindness of others - she now can rehab and get back to school. Best of luck to her as she trains to become a chef!
- Carrie Sharp
