As a financial advisor, I am excited to share some big changes to 529 plans that have recently been implemented through the SECURE Act 2.0. One of the biggest concerns for parents saving for their child’s college education is the possibility that their child may not end up attending college. With the new changes to 529 plans, parents no longer need to worry about this scenario.

Under the SECURE Act 2.0, if a 529 plan has been maintained for 15 years or longer, and the child for whom it was established does not attend college, the unused money in the plan can be rolled over to a Roth IRA for the benefit of the child. This is a game-changer for parents who want to ensure that their savings are not wasted and can be used for their child’s future, regardless of whether or not they attend college.

Let’s look at an example of how this might work in practice. A parent begins funding a 529 plan for their child when they are born. The child grows up and decides not to attend college. Because the 529 plan has been maintained for 15 years or longer, the parent can now roll over the unused funds to a Roth IRA for the child. This Roth IRA can now be used to save for retirement, providing the child with a nest egg for their future.

In light of these changes to 529 plans under the SECURE Act 2.0, it’s important to review your savings strategy and consider if a 529 plan is right for you and your family. If you have been sitting on money and not putting it into a 529 plan, now may be the perfect time to reconsider.

At Oxford Financial Planners, we understand the importance of making the most of your savings and ensuring that your money is working for you and your family. Our team of experienced financial advisors is here to help you navigate the changes to 529 plans and make the best decisions for your unique situation. So, if you have any questions or concerns, don’t hesitate to give us a call. We would be happy to talk you through your options.