Stepwise.

529 to Roth IRA Rollover Calculator

Work out how much of a leftover 529 can move to the beneficiary’s Roth IRA under the five statutory gates — the yearly schedule, the $35,000 lifetime cap, and what to do with the excess.

How to use this calculator

  1. 1Check the account age first — it is the gate families most often fail, and the reason to open a 529 with a small deposit the year a child is born.
  2. 2Enter the beneficiary’s earned income honestly: no compensation, no rollover that year.
  3. 3Read the schedule as a plan: the cap takes about five years of transfers to use, so the leftover 529 becomes a five-year standing instruction.
  4. 4For balances above the cap, compare the withdrawal figure with the beneficiary-change option before assuming the excess is trapped.

How the calculation works

Rollable = min(balance − last-5-years contributions and their earnings, $35,000 − prior rollovers). Per year = min(IRA limit − own contributions, earned income). Excess withdrawn: only earnings taxed, at the marginal rate plus 10%
Fifteen-year clock
The account itself must have been open 15 years ending on the distribution date; whether a beneficiary change restarts it is unresolved
Five-year lookback
Contributions within five years of the transfer, and earnings on them, are ineligible
The annual gate
The rollover counts as a Roth contribution: capped at the $7,500 limit less the beneficiary’s own IRA contributions, and never above their compensation
$35,000 lifetime
Aggregate across all years, per beneficiary, stated in the section and not indexed

Earnings locked by the lookback are approximated at the account’s overall earnings ratio.

The Roth value at 65 compounds each annual tranche from its own transfer year.

The Roth income phase-out does not apply to the rollover — only the compensation requirement does.

Worked example

A $60,000 leftover after graduation, account opened at birth

  1. 1.The account clears the fifteen-year clock and nothing was contributed in the last five years, so $35,000 — the lifetime cap — can move.
  2. 2.The spigot runs at $7,500 a year against $30,000 of earned income, so emptying it takes five annual transfers.
  3. 3.Those transfers compound to roughly $531,000 of tax-free money by 65 at 7%.
  4. 4.The $25,000 above the cap has options: a sibling, a future grandchild, or a withdrawal where only earnings are taxed — $21,000 nets out at a 22% rate.

Result: $35,000 rolls over across five years — worth about $531,000 tax-free at 65

The same account, but topped up two years ago

  1. 1.A $10,000 contribution two years ago locks $15,000 — the contribution plus its share of earnings — behind the five-year lookback.
  2. 2.The rollable amount is unchanged at $35,000 here, because the movable balance still clears the cap.
  3. 3.But a smaller account would have felt it directly: the lookback bites exactly when families top up late to “finish” the account.
  4. 4.The locked slice unlocks as each contribution ages past five years — patience, again.

Result: The late top-up locks $15,000 for now, and the five-year schedule still moves $35,000

The fear the section was written for

The commonest reason families underfund 529 plans is not the contribution limits or the investment menus — it is the fear of the trapped dollar. What if the child gets a scholarship, skips college, or spends less than saved? For years the honest answer was unattractive: change the beneficiary, or pay income tax plus a 10% additional tax on the earnings to get the money back.

Section 529(c)(3)(E) changed the ending. Since 2024, up to $35,000 of a leftover balance can move into a Roth IRA in the beneficiary’s name — no tax, no penalty, and no use-it-for-education requirement. The unused college fund becomes the start of a retirement fund, which is close to the best possible destination for money already sheltered for two decades.

The design is deliberately slow. Every gate in the section — the fifteen-year account age, the five-year contribution lookback, the annual IRA-limit spigot — exists to stop the obvious abuse of running money through a 529 into a Roth at scale. Understood that way, the gates stop being annoyances and become the specification: this is a patient, five-year decant of a modest sum, not a conversion strategy.

The five gates, in the order they bite

The fifteen-year clock fails more families than any other gate, and it belongs to the specific account. An account opened when the child was ten is not eligible until they are twenty-five. The practical lesson runs backwards in time: open the 529 the year the child is born, even with a token deposit, because the clock it starts is worth more than the deposit. Whether changing the beneficiary restarts the clock is a question the IRS has pointedly not answered; conservative planning assumes it might.

The five-year lookback locks recent contributions and their earnings — aimed at exactly the late top-up a finishing family is tempted to make. The annual spigot is the Roth contribution limit itself, $7,500 in 2026, reduced by anything the beneficiary contributes on their own — and because the rollover IS a Roth contribution, it cannot exceed the beneficiary’s earned income for the year. A beneficiary between jobs rolls over nothing; a summer job reopens the gate.

The receiving account must belong to the designated beneficiary — this is the child’s retirement money now, not the parent’s — and the $35,000 aggregate cap closes the set. Unindexed, per beneficiary, forever. Five annual transfers of roughly the IRA limit empty it, which is why the right mental model is a standing instruction to the plan administrator, revisited each January.

What it is worth, and what to do with the rest

The arithmetic case for the rollover is the beneficiary’s age. Thirty-five thousand dollars placed in a Roth across a beneficiary’s early twenties compounds for four decades: at 7%, roughly half a million tax-free dollars at 65, from education money that was never spent. There is no other lever a 23-year-old’s finances can pull with that effect, and the income phase-out that blocks high-earning young professionals from direct Roth contributions does not apply here.

For the balance above the cap, the menu is better than folklore suggests. A beneficiary change to a sibling — or, held patiently, to a future grandchild — keeps the shelter running across generations; there is no time limit on a 529. Graduate school reopens qualified spending. And the non-qualified withdrawal, the option families dread, taxes and penalises only the EARNINGS: basis comes back untouched, so a half-earnings account surrenders far less than the imagined ten per cent of everything.

Two administrative facts round it out. Several states treat the rollover as a non-qualified distribution and claw back the state deduction they gave on the way in — the federal gift does not bind the states, and a phone call to the plan settles it. And the mechanics must be direct trustee-to-trustee; a withdrawal deposited into a Roth by hand is just a non-qualified distribution with paperwork. Done properly, the whole strategy is five forms over five Januaries, and a retirement account the beneficiary did not have to earn.

What this assumes, and where it stops

Assumptions

  • The 2026 IRA contribution limit of $7,500 holds for each year of the schedule, and the beneficiary is under 50.
  • Earnings locked by the five-year lookback are approximated at the account’s overall earnings ratio.
  • The beneficiary’s earned income and own IRA contributions stay at the entered levels through the transfer years.
  • The Roth projection compounds each tranche at the entered return to age 65, with no withdrawals.
  • The account and beneficiary satisfy the conditions not modelled here — designated-beneficiary identity and trustee-to-trustee mechanics.

Limitations

  • Whether a beneficiary change restarts the fifteen-year clock is unresolved by the IRS and treated conservatively in prose, not modelled.
  • State clawback of prior deductions varies and is flagged rather than computed.
  • The IRA catch-up for beneficiaries aged 50+ is not added to the annual gate.
  • The scholarship exception, which waives the 10% additional tax on matching withdrawals, is outside the excess pricing.
  • Future increases in the IRA limit would shorten the schedule; the projection holds it flat, which is conservative.
  • The 529 plan’s own rules can be stricter than the statute; the plan document governs.

Common questions

How much of a 529 can be rolled into a Roth IRA?

$35,000 per beneficiary over their lifetime — the statutory aggregate cap, not indexed for inflation. It moves in annual instalments capped at the Roth IRA contribution limit ($7,500 for 2026) minus the beneficiary’s own IRA contributions, and never more than their earned income for the year. Emptying the full cap therefore takes about five years of transfers.

What are the requirements for a 529-to-Roth rollover?

Five, all statutory: the account must have been open at least 15 years; contributions from the last 5 years (and their earnings) cannot move; the transfer must be direct trustee-to-trustee; the Roth IRA must be in the designated beneficiary’s name, with the annual amount within their compensation and the IRA limit; and $35,000 aggregate per beneficiary. The Roth income phase-out does not apply — a high-earning beneficiary remains eligible.

Does the beneficiary need earned income for the rollover?

Yes. The rollover is treated as a Roth IRA contribution, and contributions cannot exceed compensation for the year. A beneficiary with no earned income rolls over nothing that year — the gate reopens with the next paycheck. What does NOT apply is the income ceiling: unlike direct Roth contributions, the rollover has no MAGI phase-out.

What should I do with 529 money above the $35,000 rollover cap?

Three honest options. Change the beneficiary to another family member — a sibling now, or hold the account for a future grandchild, since 529s have no expiry. Keep it for graduate or professional school. Or withdraw it, which is milder than feared: only the earnings portion is taxed and subject to the 10% additional tax, while basis comes back untouched. On a half-earnings account at a 22% rate, about 84% of the excess still comes out.

Does opening a 529 early matter for the Roth rollover?

It is the single most consequential step. The fifteen-year clock runs on the specific account, so a 529 opened with a token deposit at birth makes the beneficiary rollover-eligible at fifteen, while an account opened at age ten keeps the door shut until twenty-five. Opening early costs almost nothing and buys the option; it is the classic case of the clock being worth more than the deposit that starts it.

Sources

Formula and content last reviewed on .

Verified figuresThe 2 statutory data sets behind this page were last checked against Cornell Law School, Legal Information Institute and US Internal Revenue Service between 14 August 2026 and 26 August 2026, effective through 31 December 2026. Every figure, source and date

Results are estimates for information only, not professional advice.

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