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Insights from Tom Moran AIF ®

Chairman | CEO | CIO Moran Wealth Management®

ith the rising cost of education, securing a child's That said, grandparents must remain cognizant of the
academic future has never been more crucial for CSS Profile—an alternate financial aid form employed by
W parents and grandparents. One of the most powerful around 200 private colleges. It's yet to be seen if the FAFSA
tools at their disposal is the 529 Plan—a tax-advantaged savings updates will influence the CSS Profile and associated aid at different
vehicle tailored for educational purposes. With the modifications institutions. Staying informed is paramount.
to the Free Application for Federal Student Aid (FAFSA) and the Rollover to Roth IRA: A New Advantage
new provision allowing unused 529 Plan savings to be transferred A significant update in the 529 Plan landscape is the ability to
to a Roth IRA, the 529 Plan are becoming an even more attractive roll over funds to a Roth IRA. Traditionally, the 529 Plan was
option for long-term planning. a commitment to educational savings since distributions could
FAFSA's New Take on Grandparent—529 Plans only be used for educational purposes. The SECURE 2.0 legislation,
Historically, there was concern that contributions from however, is a game changer. From the 2024, surplus funds in
grandparents through 529 Plan could reduce a student's eligibility 529 Plan can be transferred to Roth IRAs, giving greater flexibility
for financial aid. The updated FAFSA, implemented this school to families and eliminating concerns of over-contributing. It's
year, addresses this issue by no longer including questions important to note that rollovers are subject to Roth IRA annual
about financial contributions from grandparents. Consequently, contribution limits. With a lifetime cap of $35,000 on transfers to
grandparents can fund their grandchild's 529 Plan without risking a Roth IRA, strategic contributions to the 529 Plan can optimize
their aid eligibility. These changes not only make it more appealing this benefit. Additionally, the 529 Account must be more than
for grandparents to start a 529 Plan but also offer assurance 15 years old. This is to ensure that these Plans, primarily created for
that accumulated savings will not jeopardize the student's future educational purposes, are indeed used for such before considering
financial aid opportunities. them for retirement savings.
Before these changes, distributions from grandparent owned Conclusion
529 Plan were treated as untaxed student income on the FAFSA, The world of 529 Plan is evolving, offering more flexibility and
thereby reducing aid eligibility. With the new FAFSA rules, options for a family to secure their child's future. At Moran Wealth
students' income and tax details will be directly sourced from Management®, we're here to guide you through these changes
federal tax returns, eliminating manual reporting of cash support and ensure your financial strategies are optimized for your family's
from grandparents. This change ensures more accurate reporting unique needs. Considering a 529 Plan or looking to maximize your
and better financial aid prospects. Roth IRA rollover opportunities? Act now!
Call us today at (239) 920-4440 to schedule your consultation.
Moran Wealth Management, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. For additional information about
Moran Wealth Management, LLC, including its services and fees, request the firm’s disclosure brochure using the contact information above or visit adviserinfo.sec.gov.
Moran Wealth Management, LLC is a separate entity and not affiliated with any other entity or practice that uses the same name.
www.Thomas.Moran@MoranWM.com
Tom Moran Phone: 239.920.4440 www.MoranWM.com
AIF® Chairman, CEO, CIO Moran Wealth Management® Fax: 239.431.5239 5801 Pelican Bay Blvd, Suite 110,
Naples, FL 34108

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN). Moran Wealth Management is a separate entity from WFAFN. 1221-04126
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