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.
This is a story I immediately went home and showed my boys - young athletes with big dreams. The Vanderbilt football team's success has stolen the spotlight - what I love about Steve Layman's story is he reveals the individual hardships it took to get there. As Clark Lea says, "we all have scuff marks." This team proves perseverance pays off!
- Carrie Sharp
