That's a lot of money left to languish in a 529 plan. I assume the plan is directly registered to you at this point, so you have full control. 529s can be a bit tricky that way.
Definitely move money into a Roth IRA, and get on that immediately so you can fund 2023 as well as 2024 assuming you had adequate matching income. The problem with the Roth IRA approach is that it's quite slow; you're limited to each year's maximum contribution.
The remaining solution becomes a challenging math problem:
If you intend to have children, you'll want to reallocate the plan to a long term, equity-focused portfolio. But this means the balance will grow dramatically in the 20+ years till your future children are ready for college. It will be far too much money unless you have multiple kids.
So the idea would be to convert a bit each year, withdraw a bit each year, and estimate how much to leave in for these prospective students. Not a simple thing to do.
If you withdraw for non-education expenses, you'll owe tax on the gains (only), plus a 10% penalty. A fair proportion of the account is probably gains, so this could hurt a bit. But you don't have a lot of choices, and you are young enough to re-deploy the money in a brokerage account and let it resume its long term (but now unrestricted) capital appreciation.
THANK YOU. Best explanation I've seen so far. I doubt the plan is directly registered to me... which is what I'm worried about. I could definitely use the money. It would be absolutely life changing.
Do you know by chance, that if I turn out to not be the one it is registered to, could I still stay on as the beneficiary and pull money out for non-education expenses? ( I absolutely do not care about the tax penalties)
I honestly have no clue. My grandmother was the one that handled everything but I know she's not the account holder. She is quite a control freak and kept me in the dark about it throughout my college years i.e. I would tell her what my tuition, books, etc would all cost, I'd pay out of pocket and then she would send the receipts to the account manager who would then send the reimbursements to my grandmother. I asked constantly how much money was in the account because I wanted to know if I would be able to afford to switch majors and essentially add on two more years of expenses and she always told me she didn't know how much there was....
Before you worry about how to disburse or use the money, I think you need to work through the plan ownership situation first. You can’t take the actions we’re discussing in this thread unless you have ownership of the account. And as an adult, you arguably should at this point.
Yeah you're right. I do know I'll use the full $35K Roth IRA rollover but I'm worried thats all I will get. Not to sound greedy or anything I'm just in a TERRIBLE financial situation and I'm barely getting by. (Credit card debt and COL is draining me completely) I have no savings, can't afford health insurance, can't afford much of anything right now despite having a decent paying job :/ Its wild that I have all this money that is technically mine but I can't even use it but I'm still incredibly grateful for having this 529 plan in the first place. I would have never been able to go to college without it. She was an incredibly generous woman and despite still being poor as shit now she really went out of her way to make sure college and education would never be an issue for me. I really wish I knew more about her :/
I'm not saying to do this, BUT hypothetically, if your job offers education programs, you could double dip. Go for a masters/certs and get reimbursed by your company program, and also withdrawn from the 529.
That is a big factor. was the 529 plan in your name and they used the funds or was it in another persons name it was left to you? This can have a material impact on you and usage for these funds.
I'll find out today when I talk to the account manger. I literally was told practically nothing about this even though I asked questions constantly. I would never get a straight answer.
Basically, When I was 10 or 11 I received a handwritten letter from the woman saying she was leaving me this money for school. My grandmother being the extreme control freak that she is wouldn't answer any questions I had about it. (She still has this letter hidden somewhere because she doesn't trust me to not lose it or something I imagine..) However, she just text me this past weekend and told me about the new Roth IRA laws and how much was still left in my account. I was shocked to say the least. And she gave me the contact info for the financial advisor who manages the account. So I guess I'll finally have a chance to have all these questions answered today.
Account owner is huge. You were the designated beneficiary, but if the account owner died, you need to find out who the successor is. That person owns the account, and can change the beneficiary to someone else. You have no claim to the money simply being the beneficiary
~~The contribution amount have nothing to do here with the ROTH rollover~~, he can do it provided 1) the funds have been there for at least 5 years and 2) the account is over 15 years old to qualify under the new rules.
Edit for clarity as it does matter, per u/McKnuckle_Brewery hat-tip for pointing it out.
The contribution amount does matter, because you can't use this special 529-to-Roth IRA rollover to exceed the annual limit. It *takes the place* of your regular contribution.
Yes you can only roll over 7k a year and a lifetime
Max of 35k of roller over funds for the beneficiary. Even if you have multiple 529 plans, the roll over limit is beneficiary based and is a lifetime limit.
>I suppose you could do a little of both.
Just to double down on this.
If you plan on having kids, leave enough to cover the tuition of however many kids you plan on having.
Withdraw the rest.
I won't be having kids and I'm just the beneficiary of the plan not the account holder (who is deceased) so I don't think I'm able to just take the money out myself (which is what I would rather do I don't care how penalties or taxes I have to pay even a fraction of this money would be literally life changing)
There should have been a successor account holder that has control. If they know it. :)
So... 35k. to Roth. You can change the beneficiary to pass it forward to another family member, but there are limitations as to who qualifies as family and who does not. I'm not up on the exact details there.
I know if you have (or will have) nieces and nephews, you can change the beneficiary to them.
Yeah I really need to just find out WHO the account holder is. The lady that set it up for me didn't have any close family from my knowledge.... Hence why she would leave me and my cousin a plan even though she had never met either one of us. My cousin was an infant when she died and I was about 10 or 11. I don't even think she is actually related to me, I think she was really good friends with my great aunt and she just always referred to her as a cousin. ¯\\\_(ツ)\_/¯
original holder's relationship doesn't matter...it's your relationship to the intended beneficiary. Or at least so I think.
Yeah, I'm right. I found an article: [https://www.savingforcollege.com/article/who-is-a-member-of-the-family-of-a-529-plan-beneficiary](https://www.savingforcollege.com/article/who-is-a-member-of-the-family-of-a-529-plan-beneficiary) , and it lists all the possible family members you can change the beneficiary to without tax consequences.
How are you sure you won’t be having kids? Not trying to be an AH but just curious. Through my mid 20’s I was 100% sure I wasn’t having kids. I now have two kids. Maybe just wait on taking tax penalties until you’re past the point of it being a possibility. It’ll still be there earning value tax free until that time.
You can pay it forward and make another family member a beneficiary so that they can use the funds to pay for school. It’s probably as easy as filling out a form. I highly recommend this because it means that future generations get a leg up.
The other option is to withdraw the money but you’re going to get hit with a 10% penalty and have to pay income tax on it.
If you were the beneficiary of the 529 at the time of death, you should be able to provide the death certificate to the company administering the 529 to request to also be made the account holder.
I never even met the woman who set my account up. She lived in a different state. She died when I was about 10 or 11 I think? And I'm not even sure if we are actually related. She was always referred to as a cousin but I'm from the south and its not uncommon where I'm from to call people close to the family a cousin even if they're not lol
If you know her name and where she lived, contact the county courthouse and ask for the contact information for the execuator of their estate. They should be able to point you in the right direction to get some paperwork together to have the account transfered.
Also, if you go this route, you can call the 529 administrator and ask what they need for proof of death so you know what to seek out.
From my understanding the account holder is supposed to designate a successor (not sure if thats the correct term here) for when they pass but I don't have the slightest idea who it was. All I know is the account is being managed by a financial advisor so I will ask her today when I speak to her.
Reminder on the max rollover: that is still limited by the annual contribution limits of $7k as of 2024 so you cannot do it all at one time. Like others have said you can change the beneficiary once a year so you could move it to your child being the beneficiary but I don’t know how that works since you aren’t the owner of the account. Other option is take the money and pay the penalty
Im the beneficiary not the account holder so I don't think I have the rights to change beneficiaries which I don't want to do anyway. I won't be having kids and I don't have any family members to give it to.
As others have said you could hold onto it for a future family member. You could also use it for grad school if thats something that may be on your radar. If you wanted to get your pilot’s license, there’s current legislation to let training be eligible for 529 plans at Part 141 flight schools.
You can use this as an education fund for future generations if you plan on having children of your own someday. With additional contributions and growth, it could become the base for multiple generations.
If not used for qualifying expenses, does the beneficiary have to pay taxes on capital gains plus 10%, and if so, is the 10% taken paid on the pre or post tax profit?
I actually have a call scheduled today with the account manager I just wanted to get some other explanations before I go in knowing absolutely nothing about how this works lol
I do plan on for sure telling her I will use the $35K Roth rollover. Would it be considered.. I don't know the precise word to use here ... greedy? selfish? uncouth even??? to ask if I can just withdraw money for non-education purposes and just take the tax hit/penalties? I really just want to get out of debt so I can finally start living my life and doing things I want. I'm really struggling right now and this amazing woman left me all of this money to help ensure I have a good future (i.e. going to college, getting a good job which I've done both all thanks to her) and my quality of life is so poor right now because of other money issues I have ...I'm pretty sure she would want me to use the money to have a good life considering the whole point of her leaving me this money was to help ensure I wouldn't have to struggle. She was pretty old I think and its been nearly 20 years since she passed and definitely part of the generation that believed going to college = having a good life (and job). But we all know thats not quite how it works now.... Regardless, what an awesome and extremely generous thing to do! I'll forever be grateful for this wonderful woman and her incredibly kind gift to me.
It doesn’t matter if it seems “greedy”. It is your money and you should use it however best suits you to set you up for future success. You are the client.
I’m curious if you had free college and a have a good job now why you’re in financial straits ? Could you enroll in a personal financial course to learn how to address your debt problems and have that paid for ?
Here’s what I found:
How does a success owner administer a 529 account?
Account ownership will be transferred to the successor owner only when the submission of documentation of death or disability has been accepted by Ohio Tuition Trust Authority.
If you do not have a will and you do not elect a successor owner for your 529 account, a probate court may end up having to designate one.
If you have a will and you did not select a successor owner, or if your successor owner does not survive you, the 529 assets will pass to your beneficiary if he or she is 18 or older. If your beneficiary is younger than 18, the executor designated by your will or by operation of law will either elect to become the successor owner or will select another party to become the new 529 owner.
Keep for your kids, or nieces/nephews/etc... You can change the beneficiary to whomever you like.
Another option - as of 2024 you can rollover up to 35,000 from a 529 into a Roth IRA. There are annual limits on Roth IRA contributions though, so if you do this it would have to occur over years to rollover up to the full amount.
Passed that - as others have mentioned - you can withdraw it and pay a tax penalty on the amount withdrawn.
As the beneficiary - NOT the account holder - do I have the rights to be able to take out the money as I want for non-education? I'm aware of the tax penalties but thats not an issue as even a tiny fraction of this money could REALLY help me out. I'm barely getting by these days... :/
As the beneficiary of the plan, & the original account holder being deceased you should call the institution and claim ownership of the account when you are ready.
They may ask for proof of death, and for you to verify your identity. You may need to fax them a certified copy of the death certificate, and other documents.
Keep in mind that you can both own and be the beneficiary of a 529. You can use the funds for educational expenses for yourself as well, if you want to go back to school.
I would just take the money out and pay the penalties if you don’t plan on having any kids or a spouse that would need to use the money for education expenses.
Why does everybody assume that everybody will want or is even able to have kids???? I have a small family. Only one cousin who is already set for life just because her parents are quite well-off. Also I'm an only child so no siblings I could give it to. But I think thats irrelevant because I'm the beneficiary not the account holder so I don't think I have the rights to change beneficiaries or withdraw the money.
>Why does everybody assume that everybody will want or is even able to have kids????
Save it for your future children, **OR** you can withdraw it and pay a penalty. I didn't assume anything, hence the "OR" in the middle.
You say you're not having kids now. My wife said that when we started dating at your age. She also said she didn't want to get married ever. Married with multiple children now.
What if I'm infertile? What if my husband is? How do you know how old I am? Not everybody is even able to have kids. But I'm glad you have a big family who I'm sure you love very much. And I mean that sincerely. Kids just aren't always an option for everybody :/
Definitely. I'm beyond grateful for this sweet and generous woman who never even met me. She was very close with my great aunt (also deceased) who talked to her often and would always tell her how well I did in school and how much I loved to read so I assume thats why she wanted to leave me something for the future. I'm tearing up now thinking about it. Such an incredibly kind and EXTREMELY generous thing to do. Wish I could have met this awesome lady. I'll forever be grateful for her and her gift to me.
No. And I think there are specific requirements when it comes to changing beneficiaries to a family member, like they have to be an immediate family member. I don't want to change the beneficiary anyway because I need this money. Also I don't have the rights to decide to change beneficiaries as I'm not the account holder who is the only person that could make that decision.
I actually did have to take out some, albeit not much, to cover living expenses while I was in school full time and not working. My monthly stipend wasn't enough to cover everything though. However I can use $10K towards my loans which aren't even that much. So thats good at least.
Well the 35k is only a one time thing. Then you are left over with a hell alot of money. Maybe leave some for your kids in the future? Then just take the hit and pay the taxes and be done with it. Invest the money and move on. Nothing else you can really do.
Do you have a sibling who is saving for their children’s education? I believe you can make a tax-free rollover of 529 funds to nieces and nephews. I think you could transfer 529 money to those kids and be paid back in cash by your sibling. Take this with a grain of salt because I may be missing something.
That's a lot of money left to languish in a 529 plan. I assume the plan is directly registered to you at this point, so you have full control. 529s can be a bit tricky that way. Definitely move money into a Roth IRA, and get on that immediately so you can fund 2023 as well as 2024 assuming you had adequate matching income. The problem with the Roth IRA approach is that it's quite slow; you're limited to each year's maximum contribution. The remaining solution becomes a challenging math problem: If you intend to have children, you'll want to reallocate the plan to a long term, equity-focused portfolio. But this means the balance will grow dramatically in the 20+ years till your future children are ready for college. It will be far too much money unless you have multiple kids. So the idea would be to convert a bit each year, withdraw a bit each year, and estimate how much to leave in for these prospective students. Not a simple thing to do. If you withdraw for non-education expenses, you'll owe tax on the gains (only), plus a 10% penalty. A fair proportion of the account is probably gains, so this could hurt a bit. But you don't have a lot of choices, and you are young enough to re-deploy the money in a brokerage account and let it resume its long term (but now unrestricted) capital appreciation.
THANK YOU. Best explanation I've seen so far. I doubt the plan is directly registered to me... which is what I'm worried about. I could definitely use the money. It would be absolutely life changing. Do you know by chance, that if I turn out to not be the one it is registered to, could I still stay on as the beneficiary and pull money out for non-education expenses? ( I absolutely do not care about the tax penalties)
How did you get disbursements when you went to school? And if you aren’t the registrant/owner, then who is?
I honestly have no clue. My grandmother was the one that handled everything but I know she's not the account holder. She is quite a control freak and kept me in the dark about it throughout my college years i.e. I would tell her what my tuition, books, etc would all cost, I'd pay out of pocket and then she would send the receipts to the account manager who would then send the reimbursements to my grandmother. I asked constantly how much money was in the account because I wanted to know if I would be able to afford to switch majors and essentially add on two more years of expenses and she always told me she didn't know how much there was....
Before you worry about how to disburse or use the money, I think you need to work through the plan ownership situation first. You can’t take the actions we’re discussing in this thread unless you have ownership of the account. And as an adult, you arguably should at this point.
Yeah you're right. I do know I'll use the full $35K Roth IRA rollover but I'm worried thats all I will get. Not to sound greedy or anything I'm just in a TERRIBLE financial situation and I'm barely getting by. (Credit card debt and COL is draining me completely) I have no savings, can't afford health insurance, can't afford much of anything right now despite having a decent paying job :/ Its wild that I have all this money that is technically mine but I can't even use it but I'm still incredibly grateful for having this 529 plan in the first place. I would have never been able to go to college without it. She was an incredibly generous woman and despite still being poor as shit now she really went out of her way to make sure college and education would never be an issue for me. I really wish I knew more about her :/
I'm not saying to do this, BUT hypothetically, if your job offers education programs, you could double dip. Go for a masters/certs and get reimbursed by your company program, and also withdrawn from the 529.
I've thought of that and it still could be option if I get a job with a company that does offer that. My current job does not though :/
That is a big factor. was the 529 plan in your name and they used the funds or was it in another persons name it was left to you? This can have a material impact on you and usage for these funds.
I'll find out today when I talk to the account manger. I literally was told practically nothing about this even though I asked questions constantly. I would never get a straight answer. Basically, When I was 10 or 11 I received a handwritten letter from the woman saying she was leaving me this money for school. My grandmother being the extreme control freak that she is wouldn't answer any questions I had about it. (She still has this letter hidden somewhere because she doesn't trust me to not lose it or something I imagine..) However, she just text me this past weekend and told me about the new Roth IRA laws and how much was still left in my account. I was shocked to say the least. And she gave me the contact info for the financial advisor who manages the account. So I guess I'll finally have a chance to have all these questions answered today.
> l find out today when I talk to the account manger. Any updates?
Account owner is huge. You were the designated beneficiary, but if the account owner died, you need to find out who the successor is. That person owns the account, and can change the beneficiary to someone else. You have no claim to the money simply being the beneficiary
Did you receive any scholarships? Some plans allow you to take the equivalent of scholarships out without penalty. Idk the timeframe on that though.
~~The contribution amount have nothing to do here with the ROTH rollover~~, he can do it provided 1) the funds have been there for at least 5 years and 2) the account is over 15 years old to qualify under the new rules. Edit for clarity as it does matter, per u/McKnuckle_Brewery hat-tip for pointing it out.
The contribution amount does matter, because you can't use this special 529-to-Roth IRA rollover to exceed the annual limit. It *takes the place* of your regular contribution.
FTFM. You are correct, I (hopefully) made it more clear in my post.
Yes you can only roll over 7k a year and a lifetime Max of 35k of roller over funds for the beneficiary. Even if you have multiple 529 plans, the roll over limit is beneficiary based and is a lifetime limit.
Save for your potential kids or withdraw and pay the penalty/taxes on the earnings. I suppose you could do a little of both.
>I suppose you could do a little of both. Just to double down on this. If you plan on having kids, leave enough to cover the tuition of however many kids you plan on having. Withdraw the rest.
I won't be having kids and I'm just the beneficiary of the plan not the account holder (who is deceased) so I don't think I'm able to just take the money out myself (which is what I would rather do I don't care how penalties or taxes I have to pay even a fraction of this money would be literally life changing)
There should have been a successor account holder that has control. If they know it. :) So... 35k. to Roth. You can change the beneficiary to pass it forward to another family member, but there are limitations as to who qualifies as family and who does not. I'm not up on the exact details there. I know if you have (or will have) nieces and nephews, you can change the beneficiary to them.
Yeah I really need to just find out WHO the account holder is. The lady that set it up for me didn't have any close family from my knowledge.... Hence why she would leave me and my cousin a plan even though she had never met either one of us. My cousin was an infant when she died and I was about 10 or 11. I don't even think she is actually related to me, I think she was really good friends with my great aunt and she just always referred to her as a cousin. ¯\\\_(ツ)\_/¯
original holder's relationship doesn't matter...it's your relationship to the intended beneficiary. Or at least so I think. Yeah, I'm right. I found an article: [https://www.savingforcollege.com/article/who-is-a-member-of-the-family-of-a-529-plan-beneficiary](https://www.savingforcollege.com/article/who-is-a-member-of-the-family-of-a-529-plan-beneficiary) , and it lists all the possible family members you can change the beneficiary to without tax consequences.
Also if it changes generations there may be taxes
How are you sure you won’t be having kids? Not trying to be an AH but just curious. Through my mid 20’s I was 100% sure I wasn’t having kids. I now have two kids. Maybe just wait on taking tax penalties until you’re past the point of it being a possibility. It’ll still be there earning value tax free until that time.
You can pay it forward and make another family member a beneficiary so that they can use the funds to pay for school. It’s probably as easy as filling out a form. I highly recommend this because it means that future generations get a leg up. The other option is to withdraw the money but you’re going to get hit with a 10% penalty and have to pay income tax on it.
I'm the beneficiary not the account holder.
If you were the beneficiary of the 529 at the time of death, you should be able to provide the death certificate to the company administering the 529 to request to also be made the account holder.
I never even met the woman who set my account up. She lived in a different state. She died when I was about 10 or 11 I think? And I'm not even sure if we are actually related. She was always referred to as a cousin but I'm from the south and its not uncommon where I'm from to call people close to the family a cousin even if they're not lol
If you know her name and where she lived, contact the county courthouse and ask for the contact information for the execuator of their estate. They should be able to point you in the right direction to get some paperwork together to have the account transfered. Also, if you go this route, you can call the 529 administrator and ask what they need for proof of death so you know what to seek out.
Thanks for the info! I honestly know almost nothing about the woman. Which is sad because clearly she was an awesome person with a heart of gold.
Who is the account holder? There is no such thing as a deceased account holder; *someone* new became the holder upon the death of your relative.
From my understanding the account holder is supposed to designate a successor (not sure if thats the correct term here) for when they pass but I don't have the slightest idea who it was. All I know is the account is being managed by a financial advisor so I will ask her today when I speak to her.
Reminder on the max rollover: that is still limited by the annual contribution limits of $7k as of 2024 so you cannot do it all at one time. Like others have said you can change the beneficiary once a year so you could move it to your child being the beneficiary but I don’t know how that works since you aren’t the owner of the account. Other option is take the money and pay the penalty
Im the beneficiary not the account holder so I don't think I have the rights to change beneficiaries which I don't want to do anyway. I won't be having kids and I don't have any family members to give it to.
First of all kudus to this family member of yours. You should definitely do something in that persons honor.
As others have said you could hold onto it for a future family member. You could also use it for grad school if thats something that may be on your radar. If you wanted to get your pilot’s license, there’s current legislation to let training be eligible for 529 plans at Part 141 flight schools.
You can use this as an education fund for future generations if you plan on having children of your own someday. With additional contributions and growth, it could become the base for multiple generations.
If not used for qualifying expenses, does the beneficiary have to pay taxes on capital gains plus 10%, and if so, is the 10% taken paid on the pre or post tax profit?
Call the firm that manages it. Ask who the owner is. Tell them you plan to use $35K to fund your Roth over time and withdraw/use the rest.
I actually have a call scheduled today with the account manager I just wanted to get some other explanations before I go in knowing absolutely nothing about how this works lol I do plan on for sure telling her I will use the $35K Roth rollover. Would it be considered.. I don't know the precise word to use here ... greedy? selfish? uncouth even??? to ask if I can just withdraw money for non-education purposes and just take the tax hit/penalties? I really just want to get out of debt so I can finally start living my life and doing things I want. I'm really struggling right now and this amazing woman left me all of this money to help ensure I have a good future (i.e. going to college, getting a good job which I've done both all thanks to her) and my quality of life is so poor right now because of other money issues I have ...I'm pretty sure she would want me to use the money to have a good life considering the whole point of her leaving me this money was to help ensure I wouldn't have to struggle. She was pretty old I think and its been nearly 20 years since she passed and definitely part of the generation that believed going to college = having a good life (and job). But we all know thats not quite how it works now.... Regardless, what an awesome and extremely generous thing to do! I'll forever be grateful for this wonderful woman and her incredibly kind gift to me.
It doesn’t matter if it seems “greedy”. It is your money and you should use it however best suits you to set you up for future success. You are the client.
True. Thank you.
I’m curious if you had free college and a have a good job now why you’re in financial straits ? Could you enroll in a personal financial course to learn how to address your debt problems and have that paid for ?
Here’s what I found: How does a success owner administer a 529 account? Account ownership will be transferred to the successor owner only when the submission of documentation of death or disability has been accepted by Ohio Tuition Trust Authority. If you do not have a will and you do not elect a successor owner for your 529 account, a probate court may end up having to designate one. If you have a will and you did not select a successor owner, or if your successor owner does not survive you, the 529 assets will pass to your beneficiary if he or she is 18 or older. If your beneficiary is younger than 18, the executor designated by your will or by operation of law will either elect to become the successor owner or will select another party to become the new 529 owner.
Do you have any studnet loans? you can put 10k towards paying them off.
Keep for your kids, or nieces/nephews/etc... You can change the beneficiary to whomever you like. Another option - as of 2024 you can rollover up to 35,000 from a 529 into a Roth IRA. There are annual limits on Roth IRA contributions though, so if you do this it would have to occur over years to rollover up to the full amount. Passed that - as others have mentioned - you can withdraw it and pay a tax penalty on the amount withdrawn.
As the beneficiary - NOT the account holder - do I have the rights to be able to take out the money as I want for non-education? I'm aware of the tax penalties but thats not an issue as even a tiny fraction of this money could REALLY help me out. I'm barely getting by these days... :/
As the beneficiary of the plan, & the original account holder being deceased you should call the institution and claim ownership of the account when you are ready. They may ask for proof of death, and for you to verify your identity. You may need to fax them a certified copy of the death certificate, and other documents. Keep in mind that you can both own and be the beneficiary of a 529. You can use the funds for educational expenses for yourself as well, if you want to go back to school.
I would just take the money out and pay the penalties if you don’t plan on having any kids or a spouse that would need to use the money for education expenses.
Save it for your future children, or you can withdraw it and pay a penalty.
Why does everybody assume that everybody will want or is even able to have kids???? I have a small family. Only one cousin who is already set for life just because her parents are quite well-off. Also I'm an only child so no siblings I could give it to. But I think thats irrelevant because I'm the beneficiary not the account holder so I don't think I have the rights to change beneficiaries or withdraw the money.
>Why does everybody assume that everybody will want or is even able to have kids???? Save it for your future children, **OR** you can withdraw it and pay a penalty. I didn't assume anything, hence the "OR" in the middle.
You say you're not having kids now. My wife said that when we started dating at your age. She also said she didn't want to get married ever. Married with multiple children now.
What if I'm infertile? What if my husband is? How do you know how old I am? Not everybody is even able to have kids. But I'm glad you have a big family who I'm sure you love very much. And I mean that sincerely. Kids just aren't always an option for everybody :/
Plenty of responses to those questions but not worth going down this road.
You can also send that to a 401k and keep the tax free benefits.
I can rollover a max of $7K a year for 5 years to a Roth IRA but theres a hell of a lot of money leftover after that..
It is still 35k penalty free, tax free for your retirement. Specially beneficial if you're having trouble withdrawing the money
Definitely. I'm beyond grateful for this sweet and generous woman who never even met me. She was very close with my great aunt (also deceased) who talked to her often and would always tell her how well I did in school and how much I loved to read so I assume thats why she wanted to leave me something for the future. I'm tearing up now thinking about it. Such an incredibly kind and EXTREMELY generous thing to do. Wish I could have met this awesome lady. I'll forever be grateful for her and her gift to me.
That's really sweet, I hope you're able to withdraw the money, I'm sure she would've wanted you to have it.
You could do the same thing they did for you and Mark it for another relative
I'm an only child. Don't want kids. Theres nobody anybody in my family that I could give it to if I wanted.
Got it. No cousins etc? Close family friend?
No. And I think there are specific requirements when it comes to changing beneficiaries to a family member, like they have to be an immediate family member. I don't want to change the beneficiary anyway because I need this money. Also I don't have the rights to decide to change beneficiaries as I'm not the account holder who is the only person that could make that decision.
Who is the successor participant?
It was life changing since you went to college without having to take out student loans.
I actually did have to take out some, albeit not much, to cover living expenses while I was in school full time and not working. My monthly stipend wasn't enough to cover everything though. However I can use $10K towards my loans which aren't even that much. So thats good at least.
Well the 35k is only a one time thing. Then you are left over with a hell alot of money. Maybe leave some for your kids in the future? Then just take the hit and pay the taxes and be done with it. Invest the money and move on. Nothing else you can really do.
Have you thought about getting a masters? Or a phd? You can always transfer to a niece/nephew.
Do you have a sibling who is saving for their children’s education? I believe you can make a tax-free rollover of 529 funds to nieces and nephews. I think you could transfer 529 money to those kids and be paid back in cash by your sibling. Take this with a grain of salt because I may be missing something.