CFP Board Code of Ethics

In 2026, a client has a 529 plan for her daughter that has been open for 20 years. The beneficiary has graduated college and does not need the remaining funds. The account balance is $60,000, all attributable to contributions and earnings made more than five years ago.

The client is considering rolling funds from the 529 plan into the beneficiary’s Roth IRA.

Which of the following statements is CORRECT?

1. The entire $60,000 may be rolled into the Roth IRA in 2026.
2. Up to $35,000 may be rolled over during the beneficiary’s lifetime, subject to annual Roth IRA contribution limits.
3. The rollover is treated as taxable income to the beneficiary.
4. The rollover is permitted only if the beneficiary has no earned income.