CollegeAmerica® 529 to Roth IRA rollovers
ARTICLE TAKEAWAYS
- Review the Internal Revenue Service (IRS) eligibility requirements to roll over assets from a 529 to a Roth IRA
- Learn the process to roll over assets in a CollegeAmerica account to a Roth IRA for the beneficiary
Unused funds in a 529 plan can be rolled over directly into a Roth IRA for the beneficiary of the 529 plan without taxes or penalties, within certain limitations.
Limitations to this provision include:
- The 529 account must be at least 15 years old*
- The amount to be rolled over must have been in the account for at least 5 years
- The Roth IRA must be in the name of the 529 plan beneficiary
- Rollover contributions must be within Roth IRA annual contribution limits** and is reduced by any “regular” traditional or Roth IRA contributions made by the beneficiary in that year
- Rollovers are limited to a maximum of $35,000 per beneficiary over their lifetime
* Account owner changes to the beneficiary may trigger a new 15-year holding period.
** Unlike regular Roth IRA contributions, there are no income limitations. However, the beneficiary must have earned income of some kind to qualify for a rollover.
Note: Capital Group cannot confirm whether a 529 rollover to a Roth IRA is eligible. Consult a tax advisor to determine that the IRS requirements have been met.
Requirements
CollegeAmerica to a Capital Bank and Trust Company (CB&T) Roth IRA
Complete the CollegeAmerica to Roth IRA Rollover Request and one of the following:
- If the receiving CB&T Roth IRA exists: 529 to Roth IRA Investment Instructions form
- If the receiving CB&T Roth IRA does not exist: Traditional/Roth IRA Application form with investment instructions for the rollover
External (non-CollegeAmerica) 529 to a CB&T Roth IRA
Complete the Rollover from an External 529 Plan to an American Funds Roth IRA form and one of the following:
- If the receiving CB&T Roth IRA exists: 529 to Roth IRA Investment Instructions form
- If the receiving CB&T Roth IRA does not exist: Traditional/Roth IRA Application form with investment instructions for the rollover
CollegeAmerica to an external (non-CB&T) Roth IRA
Complete the CollegeAmerica Distribution Request with a signature guarantee or the Roth IRA custodian’s rollover form with an acceptance signature.
Contact us
Have questions or need additional support?
Contact us 8:00 a.m. to 7:00 p.m. ET, Monday through Friday.
For financial professionals only. Not for use with the public.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
Use of this website is intended for U.S. residents only.
The guidelines and procedures provided in the Account Resource Center may not apply to networked accounts or accounts not directly held by American Funds. The guidelines and procedures provided also apply only to those retirement accounts or Coverdell ESAs invested in American Funds with Capital Bank and Trust Company (CB&T) as custodian. The guidelines and procedures provided in the Account Resource Center do not apply to plans held in our retirement plan solutions — PlanPremier, PlanPremier-TPA or RecordkeeperDirect. Information on the Account Resource Center may change periodically, and previously printed information may not be current. Please refer to capitalgroup.com for the most current information available.
Financial professionals should always contact their back office to determine if there are any restrictions on the use of American Funds products, tools, services, websites and literature.
CollegeAmerica is distributed by Capital Client Group, Inc. and sold through unaffiliated intermediaries.
Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits, such as financial aid, scholarship funds and protection from creditors, not available through CollegeAmerica. Before investing in any state’s 529 plan, investors should consult a tax advisor.