How Your Unused 529 Plan Funds Can Become Part of Your Retirement Plan
After inflation surged in 2022 to a peak not seen since the 1970s, many people are understandably concerned about whether they will be able to retire comfortably. To help put that goal more within reach again, late last year, Congress passed and President Joe Biden signed the SECURE 2.0 Act, which significantly updates U.S. retirement planning law. Among the numerous clever changes contained in the act was one relating to 529 college savings plans. Now, it is possible to repurpose unused 529 funds -- previously earmarked for qualified education expenses -- to help finance your retirement.
Here's how the SECURE 2.0 Act aims to make life a little easier for beneficiaries of overfunded 529 plans.
To be clear, a 529 account is a tax-advantaged investment vehicle used to save and invest for qualified education expenses such as college tuition or apprenticeship costs. Parents and other relatives can contribute substantial amounts to a young person's 529 plan with the intent that those dollars -- and their investment gains -- will fund the child's future higher education.
Source Fool.com
