Bloomberg Surveillance · Saturday, August 29, 2026
Following rule changes in 2022, individuals without children are using 529 college savings plans as a 'backdoor' method to save for retirement, particularly after maxing out retirement accounts. This strategy involves having funds in the 529 for at least five years and allows for transfers up to $35,000 lifetime to a Roth IRA.
“People without kids are now able to put money into those accounts after hitting the annual limits for contributing to their retirement plans.”
“So in a way, they treat the 529 as a backdoor for funding a Roth IRA.”
“It's a very complicated process. And a lot of the financial advisors that we spoke with say that it should probably kind of come in at the end, you know, after you've maxed out these other accounts.”