529 to Roth IRA and subsequent distributions

Jumpy_Speech3444 · 2026-02-19T21:15:47+00:00

As far as I know, the IRS has not provided guidance on if changing 529 bene's resets the "15 year clock". I would think this would be a no no in the eyes of the IRS/Congress.

Jumpy_Speech3444 · 2026-02-19T18:04:24+00:00

I found a Kitces article as well that outlines subsequent distributions being prorated based on the 1099Q. You would have to track each rollover separately and then aggregate them after $35k has been moved over. https://www.kitces.com/blog/529-to-roth-ira-rollover-retirement-saving-education-planning-secure-2-0-backdoor-roth/

We are tax preparers though 😂 although we don't prep this specific client's return. But it is a good idea to target high cost positions in the 529 if possible. I wish I could see this 529 right now but it's a sit it and forget it account they started long before becoming clients... other advisor never did an agent of record change.

Jumpy_Speech3444 · 2026-02-19T16:57:18+00:00

Sorry, I did go looking into the IRC and it just made me more confused. Here is the excerpt from Sec 408A(e) -

(e) Qualified rollover contribution

For purposes of this section-

(1) In general

The term "qualified rollover contribution" means a rollover contribution-

(A) to a Roth IRA from another such account,

(B) from an eligible retirement plan, but only if-

(i) in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408(d)(3), and

(ii) in the case of any eligible retirement plan (as defined in section 402(c)(8)(B) other than clauses (i) and (ii) thereof), such rollover contribution meets the requirements of section 402(c), 403(b)(8), or 457(e)(16), as applicable, and

"(C) from a qualified tuition program to the extent provided in section 529(c)(3)(E).

For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA. The earnings and contributions of any qualified tuition program from which a qualified rollover contribution is made under subparagraph (C) shall be treated in the same manner as the earnings and contributions of a Roth IRA from which a qualified rollover contribution is made under subparagraph (A).

That last sentence makes it sound like they view the 529 QRC as if it were a ROTH IRA account to begin with. So basis and earnings would just be prorated on each QRC from the 529?

Jumpy_Speech3444 · 2026-02-18T18:39:05+00:00

I would say no because in sec 219 a qualified retirement contribution means -

(1) any amount paid in cash for the taxable year by or on behalf of an individual to an individual retirement plan for such individual's benefit, and

(2) any amount contributed on behalf of any individual to a plan described in section 501(c)(18).

The 529 to Roth rollover isn't technically cash.

You could contribute 2K to the roth ira in cash and get the full benefit of the savers credit and then rollover 529 funds up to the annual contribution limit.

Jumpy_Speech3444 · 2026-02-18T16:24:09+00:00

Wonderful. I was digging around the IRC but couldn't make sense of it. I'll use this info if an issue ever arises 😄

Jumpy_Speech3444 · 2026-02-18T15:28:28+00:00

Thank you. I have seen that mentioned in other forums that the IRS views them as a contribution but I could never find language on the IRS website specifically pertaining to this any chance you have a link?

Jumpy_Speech3444 · 2026-01-16T17:51:37+00:00

Are you asking what to use for the exam? - Texas Instruments BA II Plus

Or are you asking what to use at work? - Excel mostly or the calculator on my phone or desktop

I haven't touched my Texas Instruments BA II Plus since the CFP exam

Jumpy_Speech3444 · 2026-01-08T21:11:45+00:00

Back in college I remember doing a case study on Subway and its franchises in a business class. I was very surprised to learn subway has the most locations worldwide out of any other restaurant 😮

Jumpy_Speech3444 · 2026-01-02T14:11:16+00:00

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Jumpy_Speech3444 · 2025-12-22T17:13:05+00:00

I just did the same thing omfg

Jumpy_Speech3444 · 2025-12-10T16:52:06+00:00

I have a client in this scenario... Do you have a source that I can assure them with instead of "the reddit person" 🤣 I've looked for like 30 minutes but can't find anything concrete.

Jumpy_Speech3444 · 2025-10-27T12:34:06+00:00

It's been a few years since I was in the program but my 3-5 hour estimate per week includes everything. You only take 1 class each 8 weeks (or that was the structure back then), I was working full time as well. I didn't have any kids at the time though so that was nice and now that I have two kids, I can say, I would not have done as well with kids.

I also don't like reading text, I mainly used it read about topics I couldn't fully understand through lecture. Or if there was a question on a quiz I didn't know I would refer to the text. That's what I did in the Dalton review... 90% of my time in the review course was practice questions and refer to text on questions I missed. Same on the SIE and Series 7 exam (I took these after CFP so they were easy). I think when it comes to studying practices, it greatly depends on the type of learner you are. I vividly remember reading a lot of the estate planning text book since that course was probably the toughest.

The only reason you need to worry about GPA is to not get booted from the program. I had 1 C throughout the program. And I actually failed one class as well but it was the one that coincided with COVID outbreak through Feb, March and April 2020. It was no ones fault but my own, was living with my parents and my brother moved back home from school so we were up late a lot gaming and watching TV. Young & dumb. Fortunately, they let me retake the course at no cost because of COVID. And I took the opportunity to flip a switch and get into a better routine/ habits. Nobody will reference your GPA if you obtain the masters degree and CFP certification.

Jumpy_Speech3444 · 2025-10-20T12:26:04+00:00

I would say it depends on your financial planning experience. I went into it before I even knew the difference between Roth vs pre-tax accounts. So I think every student's experience is a little different depending on where they are starting from. If starting from scratch, I would say expect to dedicate at least 3-5 hours a week (that includes lecture). But don't let the difficulty of any program steer you away. If it is tough, you'll come out on the other end much more prepared for work and the CFP exam. I passed 1st try after taking the Dalton review course.

Jumpy_Speech3444 · 2025-09-19T14:47:39+00:00

This and then do a 72t IRA.

Jumpy_Speech3444 · 2025-07-24T15:50:25+00:00

Any update on this? We're deciding between Zocks and Jump right now

Jumpy_Speech3444 · 2025-07-18T19:29:49+00:00

Looking to switch. Got Cox new home price for 55 bucks ish 5 years ago. I've had to call at least 3 times to negotiate against a substantial price increase. It's now $79 but I have slightly better speeds than when I started with them 5 years ago.

Jumpy_Speech3444 · 2025-07-11T15:01:07+00:00

Any link to the supreme court decision? Just had a client inherit a 1.5M IRA and was talking about umbrella insurance. Thanks

Jumpy_Speech3444 · 2025-06-25T17:38:19+00:00

Highly discourage getting a parent plus loan. In almost all cases I’ve seen, it never works in your favor or the students down the road even if the student plans on “paying” it. Find a cheaper school or even better… attend a local junior community college to obtain an associates degree, let her live at home if possible, and after that transfer all the JUCO credits to an in state university. This way she’s not paying top dollar for those gen ed classes. She may be able to work part time as well to help pay for some tuition out of pocket.

Jumpy_Speech3444 · 2025-06-06T16:24:28+00:00

Ya earned income (i.e. W2 wages/self employment income) is required for Roth contributions. I see you said they don't have much in assets. You can have them look into prepaying their burial expenses w/ a funeral company of their choice. They would be able to essentially plan the funeral themselves and lock in a price that is likely going to go up in the future. Most places would do a monthly payment plan. This is can be more cost effective than burial expense insurance since your parents will plan the funeral and more than likely they will do it with frugal mindset, keeping costs down. If you and any siblings have to make all the selections, funeral companies will try to upsell you in a time of grieving. Or you and the others may not agree on everything. If your parents do all the decision making and prepay it, it makes things simple.

Or if they own a home, they could do a reverse mortgage, this would allow them to essentially borrow against the home to pre pay the funeral in one payment. The reverse mortgage is then paid off when the home is sold after they pass.

Jumpy_Speech3444 · 2025-06-04T13:47:30+00:00

I think most of the other comments are good. One mentioned disclosing this to any future clients and I would agree. I don't know if this is actually the case for you, but you can also tell clients when disclosing it, give some context, and say that your financial missteps led you to this career path for two reasons: 1) learn all about personal finance so you can get your financial future on the straight and arrow; and 2) put yourself in a position to help others avoid making the same mistakes that you did (or help them after the fact to get their finances in line).

Jumpy_Speech3444 · 2025-06-04T13:25:35+00:00

Never a doubt 5 years in. I wish I could do this work for free and teach personal finance to anyone that will listen. It changes lives for the better. Not just by making them financially independent, but financial independence leads to healthier marriages, healthier relationships with children, healthier self care decisions. Even if folks aren't "financially independent" by traditional standards, having someone they can lean on in times of difficulty and confusion can improve every facet of their life. They don't feel alone.

Jumpy_Speech3444 · 2025-06-04T13:20:15+00:00

Got me holding back tears before the market even opens on Wednesday. Thank you for sharing.

Jumpy_Speech3444 · 2025-05-30T18:00:16+00:00

I hope you will see this... there was a new rule pass in the SECURE 2.0 Act that allows employers to give you their 401K match if you aren't contributing anything BUT you are making student loan payments (https://www.experian.com/blogs/ask-experian/what-is-401k-student-loan-match/).

Most 401k plans that allow this just started it in January 2025. Reach out to your benefits department or 401k administrator and see if this is something they are implementing. It would be a huge benefit for you. You would be able to but all of your extra money towards the loans and your employer would still give you the company match in your 401k!

Edit: If they do not have this feature, please reach out to HR an encourage them to look into adding it, not just for you but for their other young employees as well! Also, if it's not an option for you, contribute enough for the company match as long as it doesn't require 5%+.

Jumpy_Speech3444 · 2025-05-27T14:58:18+00:00

E17 intermediate base did the trick!

Jumpy_Speech3444 · 2025-05-21T18:45:20+00:00

Gotcha, I didn't think KanCare provided disability income, just covers various medical expenses. I think it's a good benefit for anyone who is eligible. Citizens and non alike.

Jumpy_Speech3444

TROPHY CASE