--- title: What to Do with Leftover 529 Funds description: As college costs continue to soar, many families are increasingly utilizing 529 college savings plans as a strategic tool to combat these expenses. These plans offer a tax-advantaged way for families --- [Skip to content](https://help.advisor.com/what-to-do-with-leftover-529-funds#main-content) English Show submenu for translations ![](https://help.advisor.com/hs-fs/hubfs/logomark-black.png?width=100&height=75&name=logomark-black.png) Open main navigation Close main navigation - English Show submenu for translations How can we help you? - There are no suggestions because the search field is empty. 1. [Advisor Wealth Management Help Center](https://help.advisor.com/?hsLang=en) 2. [Investing](https://help.advisor.com/investing?hsLang=en) 3. [Investment Strategies](https://help.advisor.com/investing?hsLang=en#investment-strategies) # What to Do with Leftover 529 Funds As college costs continue to soar, many families are increasingly utilizing 529 college savings plans as a strategic tool to combat these expenses. These plans offer a tax-advantaged way for families to save for their children's future educational expenses. As circumstances change, you may end up with extra funds in your 529 plan. The good news is that you have options to make the most of these leftover funds. #### Here are four options to consider if you have leftover funds in a 529 account: **1. Roll Funds into a Roth IRA** With the introduction of Secure Act 2.0, savers now have the ability to roll over unused 529 plan funds into a Roth IRA, penalty-free and without incurring income taxes. This option offers more flexibility with excess funds, allowing families to continue benefiting from tax-advantaged growth. - **Requirements:** The 529 account must have been open for at least 15 years. - **Limitations:** There is a lifetime rollover cap of $35,000. Additionally, the amount rolled over counts toward your annual IRA contribution limit, which is $7,000 in 2024 for those under 50. **2. Change the Beneficiary** If the original beneficiary doesn’t need the leftover funds, perhaps because they’ve completed their education or received scholarships, you can change the beneficiary of the 529 plan. The new beneficiary must be a qualified family member, such as a sibling, step-sibling, or even a parent. - **Advantages:** Changing the beneficiary doesn’t trigger any withdrawal penalties or taxes, making it a great way to repurpose the funds for another family member’s education. **3. Pay Off Student Loans** Thanks to the Secure Act of 2019, you can use 529 funds to pay off student loans. You can pay up to $10,000 per year toward the student loans of the plan’s beneficiary or their siblings. - **Advantages:** This is a practical use for leftover 529 funds, helping to reduce student debt without any penalties. **4. Withdraw the Money Outright** If none of the options above are possible, you can simply withdraw the leftover 529 funds. While your initial contributions can be withdrawn tax- and penalty-free, any earnings not used for qualified education expenses may be subject to income tax and a 10% penalty. - **Advantages:** You get immediate access to the funds, which can be used to support your current financial needs or redirected into other savings and investment accounts. - **Consideration:** If the beneficiary received scholarships, you can withdraw an amount equivalent to the scholarship for non-qualified expenses without incurring the 10% penalty. For more personalized advice on how to best use your 529 plan funds, reach out to us at help@advisor.com. 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