Given the recent changes on rolling over a 529 plan, could one start a 529 plan and then convert it to a Roth 15 years down the line if they don't use it for any schooling? I haven't considered 529 plans before and I am not sure if this is a loop hole and legal to do.

I am assuming with this approach one would:

  1. be limited to having at most $35,000 in the 529 plan as this is the most that can be rolled over

  2. would take $35,000 / $6000 per year ~ 6 years to rollover the lifetime limit to a Roth IRA assuming current IRA contribution limits.

  3. would not need to save another $6000 during the years in (2) as the conversion counts as part of the limit.

Are my points above correct and is this legal?

  • Does your state give you a state tax break for the contributions? Do they pull this back if you don't use it for educational purposes? Does the state have a limit regarding how much you can contribute each year? Feb 12 at 21:41
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    You're assuming that this rule is not going to be repealed before your 15 years holding period lapses...
    – littleadv
    Feb 12 at 22:02
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    Absolutely. In fact, similar mega-backdoor conversion (traditional to roth 401k) was on the chopping block as part of the BBB legislation, which ended up not passing.
    – littleadv
    Feb 13 at 23:28
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    @heretoinfinity. If you get a state tax break, and that is the thing that make your plan a money maker, but then you have to pay back the tax break that would be bad. Feb 14 at 17:17
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    @heretoinfinity the conversion wouldn't have been allowed, not the account. So whatever after tax/traditional 401k you already had - would remain, and whatever Roth you already converted would remain, but the conversion wouldn't be allowed. Similar here, you may end up with a 529 balance, but you may end up not being able to convert because politics change and this is repealed.
    – littleadv
    Feb 14 at 21:02

1 Answer 1


From the comments to the question, it appears that it is not a good idea to get a 529 plan and expect to roll it over to a Roth IRA as there might be a law preventing such a conversion before one becomes eligible to do so.

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